Annual Financial Report - 27 of 48

RNS Number : 3820B

HSBC Holdings PLC

03 April 2013

 



Further analysis of impairment

Movement in impairment allowances by industry sector and by geographical region

(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
Impairment allowances at 1 January 2012...	5,292		581		782		1,731		7,239		2,011		17,636
Amounts written off ...................................	(2,375)		(219)		(540)		(305)		(4,181)		(2,192)		(9,812)
Personal ...................................................	(828)		(128)		(347)		(126)		(3,862)		(1,614)		(6,905)
- first lien residential mortgages ............	(28)		-		(7)		(2)		(1,952)		(70)		(2,059)
- other personal1 ...................................	(800)		(128)		(340)		(124)		(1,910)		(1,544)		(4,846)
Corporate and commercial .......................	(1,428)		(91)		(193)		(154)		(234)		(577)		(2,677)
- manufacturing and international trade and services .........................................	(661)		(91)		(164)		(137)		(59)		(498)		(1,610)
- commercial real estate and other property-related ..................................	(377)		-		(8)		(6)		(97)		(18)		(506)
- other commercial9 ..............................	(390)		-		(21)		(11)		(78)		(61)		(561)
Financial2 .................................................	(119)		-		-		(25)		(85)		(1)		(230)
Recoveries of amounts written off in previous years ........................................................	409		31		150		75		129		352		1,146
Personal ...................................................	354		30		132		50		88		312		966
- first lien residential mortgages ............	34		4		2		5		46		49		140
- other personal1 ...................................	320		26		130		45		42		263		826
Corporate and commercial .......................	51		1		18		25		38		39		172
- manufacturing and international trade and services .........................................	16		1		5		2		7		28		59
- commercial real estate and other property-related ..................................	9		-		11		-		19		2		41
- other commercial9 ..............................	26		-		2		23		12		9		72
Financial2 .................................................	4		-		-		-		3		1		8
Charge to income statement .......................	1,874		84		340		255		3,462		2,145		8,160
Personal ...................................................	348		96		234		57		3,228		1,399		5,362
- first lien residential mortgages ............	(56)		(11)		14		7		1,986		(30)		1,910
- other personal1 ...................................	404		107		220		50		1,242		1,429		3,452
Corporate and commercial .......................	1,547		(14)		102		169		252		746		2,802
- manufacturing and international trade and services .........................................	670		(12)		32		80		62		625		1,457
- commercial real estate and other property-related ..................................	444		7		55		62		94		28		690
- other commercial9 ..............................	433		(9)		15		27		96		93		655
Financial2 .................................................	(21)		2		4		29		(18)		-		(4)
Exchange and other movements18 ..............	161		(4)		14		55		(1,033)		(154)		(961)
At 31 December 2012...............................	5,361		473		746		1,811		5,616		2,162		16,169
Impairment allowances against banks:
- individually assessed .............................	40		-		-		17		-		-		57
Impairment allowances against customers:
- individually assessed .............................	3,781		192		442		1,323		428		406		6,572
- collectively assessed17 ..........................	1,540		281		304		471		5,188		1,756		9,540
At 31 December 2012...............................	5,361		473		746		1,811		5,616		2,162		16,169

	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
Impairment allowances at 1 January 2011.....	5,740		629		959		1,669		9,234		2,010		20,241
Amounts written off .....................................	(2,781)		(210)		(554)		(187)		(6,830)		(1,918)		(12,480)
Personal .....................................................	(1,685)		(116)		(391)		(172)		(6,591)		(1,476)		(10,431)
- first lien residential mortgages ..............	(25)		-		(6)		(2)		(2,545)		(84)		(2,662)
- other personal1 .....................................	(1,660)		(116)		(385)		(170)		(4,046)		(1,392)		(7,769)
Corporate and commercial .........................	(1,066)		(94)		(161)		(15)		(233)		(440)		(2,009)
- manufacturing and international trade and services ...........................................	(554)		(64)		(120)		(4)		(100)		(295)		(1,137)
- commercial real estate and other property-related ....................................	(265)		(6)		(13)		(10)		(83)		(15)		(392)
- other commercial9 ................................	(247)		(24)		(28)		(1)		(50)		(130)		(480)
Financial2 ...................................................	(30)		-		(2)		-		(6)		(2)		(40)
Recoveries of amounts written off in previous years ..........................................................	572		47		185		102		132		388		1,426
Personal .....................................................	525		31		168		53		101		297		1,175
- first lien residential mortgages ..............	21		4		3		-		39		19		86
- other personal1 .....................................	504		27		165		53		62		278		1,089
Corporate and commercial .........................	44		16		12		49		30		91		242
- manufacturing and international trade and services ...........................................	19		16		8		2		8		82		135
- commercial real estate and other property-related ....................................	7		-		1		-		8		4		20
- other commercial9 ................................	18		-		3		47		14		5		87
Financial2 ...................................................	3		-		5		-		1		-		9
Charge to income statement .........................	1,902		117		274		292		7,050		1,870		11,505
Personal .....................................................	610		77		215		124		6,887		1,405		9,318
- first lien residential mortgages ..............	98		(10)		5		42		3,899		69		4,103
- other personal1 .....................................	512		87		210		82		2,988		1,336		5,215
Corporate and commercial .........................	1,277		37		55		146		122		477		2,114
- manufacturing and international trade and services ...........................................	416		57		35		25		42		326		901
- commercial real estate and other property-related ....................................	498		-		9		150		48		59		764
- other commercial9 ................................	363		(20)		11		(29)		32		92		449
Financial2 ...................................................	15		3		4		22		41		(12)		73
Exchange and other movements18 ................	(141)		(2)		(82)		(145)		(2,347)		(339)		(3,056)
At 31 December 2011 ..................................	5,292		581		782		1,731		7,239		2,011		17,636
Impairment allowances against banks:
- individually assessed ...............................	50		-		-		17		58		-		125
Impairment allowances against customers:
- individually assessed ...............................	3,754		288		505		1,250		416		324		6,537
- collectively assessed17 ............................	1,488		293		277		464		6,765		1,687		10,974
At 31 December 2011 ..................................	5,292		581		782		1,731		7,239		2,011		17,636

For footnotes, see page 249.

Movement in impairment allowances by industry sector

(Unaudited)

	2012		2011		2010		2009		2008
	US$m		US$m		US$m		US$m		US$m
Impairment allowances at 1 January .................................	17,636		20,241		25,649		23,972		19,212
Amounts written off .........................................................	(9,812)		(12,480)		(19,300)		(24,840)		(17,955)
Personal ........................................................................	(6,905)		(10,431)		(16,458)		(22,703)		(16,625)
- first lien residential mortgages ................................	(2,059)		(2,662)		(4,163)		(4,704)		(2,110)
- other personal1 ......................................................	(4,846)		(7,769)		(12,295)		(17,999)		(14,515)
Corporate and commercial ............................................	(2,677)		(2,009)		(2,789)		(1,984)		(1,294)
- manufacturing and international trade and services .	(1,610)		(1,137)		(1,050)		(1,093)		(789)
- commercial real estate and other property-related .	(506)		(392)		(1,280)		(327)		(115)
- other commercial9 .................................................	(561)		(480)		(459)		(564)		(390)
Financial2 ......................................................................	(230)		(40)		(53)		(153)		(36)
Recoveries of amounts written off in previous years .........	1,146		1,426		1,020		890		834
Personal ........................................................................	966		1,175		846		712		686
- first lien residential mortgages ................................	140		86		93		61		19
- other personal1 ......................................................	826		1,089		753		651		667
Corporate and commercial ............................................	172		242		156		170		142
- manufacturing and international trade and services .	59		135		92		123		76
- commercial real estate and other property-related .	41		20		21		9		6
- other commercial9 .................................................	72		87		43		38		60
Financial2 ......................................................................	8		9		18		8		6
Charge to income statement .............................................	8,160		11,505		13,548		24,942		24,131
Personal ........................................................................	5,362		9,318		11,187		19,781		20,950
- first lien residential mortgages ................................	1,910		4,103		3,461		4,185		5,000
- other personal1 ......................................................	3,452		5,215		7,726		15,596		15,950
Corporate and commercial ............................................	2,802		2,114		2,198		4,711		2,879
- manufacturing and international trade and services .	1,457		901		909		2,392		1,573
- commercial real estate and other property-related .	690		764		660		1,492		755
- other commercial9 .................................................	655		449		629		827		551
Financial2 ......................................................................	(4)		73		163		450		302
Exchange and other movements18 ....................................	(961)		(3,056)		(676)		685		(2,250)
At 31 December ...............................................................	16,169		17,636		20,241		25,649		23,972
Impairment allowances against banks:
- individually assessed ...................................................	57		125		158		107		63
Impairment allowances against customers:
- individually assessed ...................................................	6,572		6,537		6,457		6,494		3,284
- collectively assessed ...................................................	9,540		10,974		13,626		19,048		20,625
At 31 December ...............................................................	16,169		17,636		20,241		25,649		23,972

For footnotes, see page 249.

 

Movement in impairment allowances on loans and advances to customers and banks

(Audited)

	Banks		Customers
	individually assessed		Individually         assessed		Collectively         assessed		Total
	US$m		US$m		US$m		US$m
2012
At 1 January ......................................................................	125		6,537		10,974		17,636
Amounts written off  ..........................................................	(70)		(2,361)		(7,381)		(9,812)
Recoveries of loans and advances previously written off ....	-		199		947		1,146
Charge to income statement ..............................................	-		2,139		6,021		8,160
Exchange and other movements18 ......................................	2		58		(1,021)		(961)
At 31 December .................................................................	57		6,572		9,540		16,169
Impairment allowances on loans; and advances to customers ......................................................................................			6,572		9,540		16,112
-  personal .....................................................................			685		7,527		8,212
-  corporate and commercial ..........................................			5,407		1,939		7,346
-  financial .....................................................................			480		74		554
	%		%		%		%
As a percentage of loans and advances19,20 ......................	0.05		0.67		0.98		1.48
	US$m		US$m		US$m		US$m
2011
At 1 January ......................................................................	158		6,457		13,626		20,241
Amounts written off  ..........................................................	(16)		(1,633)		(10,831)		(12,480)
Recoveries of loans and advances previously written off ....	-		191		1,235		1,426
Charge to income statement ..............................................	(16)		1,931		9,590		11,505
Exchange and other movements18 ......................................	(1)		(409)		(2,646)		(3,056)
At 31 December .................................................................	125		6,537		10,974		17,636
Impairment allowances on loans and advances to customers ......................................................................................			6,537		10,974		17,511
-  personal .....................................................................			694		9,066		9,760
-  corporate and commercial ..........................................			5,231		1,820		7,051
-  financial .....................................................................			612		88		700
	%		%		%		%
As a percentage of loans and advances19,20 ......................	0.09		0.71		1.20		1.67

For footnotes, see page 249.

 

Individually and collectively assessed impairment charge to the income statement by industry sector

(Unaudited)

	2012						2011
	Individually    assessed         US$m		Collectively    assessed         US$m		Total         US$m		Individually      assessed          US$m		Collectively      assessed          US$m		Total          US$m
Banks ..........................................................	-		-		-		(16)		-		(16)
Personal ......................................................	96		5,266		5,362		141		9,177		9,318
First lien residential mortgages .................	40		1,870		1,910		104		3,999		4,103
Other personal1 .......................................	56		3,396		3,452		37		5,178		5,215
Corporate and commercial ..........................	2,029		773		2,802		1,703		411		2,114
Manufacturing and international trade and services .........................................	910		547		1,457		572		329		901
Commercial real estate and other property-related ..................................	604		86		690		768		(4)		764
Other commercial9 ..................................	515		140		655		363		86		449
Financial .....................................................	14		(18)		(4)		87		2		89
Total charge to income statement ...............	2,139		6,021		8,160		1,915		9,590		11,505

For footnotes, see page 249.

Net loan impairment charge to the income statement

(Unaudited)

	2012		2011		2010		2009		2008
	US$m		US$m		US$m		US$m		US$m
Individually assessed impairment allowances .....................	2,139		1,915		2,625		4,458		2,064
New allowances .............................................................	3,272		2,904		3,617		5,173		2,742
Release of allowances no longer required .......................	(934)		(798)		(847)		(581)		(565)
Recoveries of amounts previously written off ...............	(199)		(191)		(145)		(134)		(113)
Collectively assessed impairment allowances .....................	6,021		9,590		10,923		20,484		22,067
New allowances net of allowance releases ......................	6,968		10,825		11,798		21,240		22,788
Recoveries of amounts previously written off ...............	(947)		(1,235)		(875)		(756)		(721)
Total charge for impairment losses ...................................	8,160		11,505		13,548		24,942		24,131
Banks ...........................................................................	-		(16)		12		70		54
Customers ....................................................................	8,160		11,521		13,536		24,872		24,077
At 31 December
Impaired loans ..................................................................	38,776		41,739		47,064		30,845		25,422
Impairment allowances .....................................................	16,169		17,636		20,241		25,649		23,972

Charge for impairment losses as a percentage of average gross loans and advances to customers by geographical region

(Unaudited)

	Europe		Hong      Kong		Rest of      Asia-    Pacific		MENA		North America		Latin America		Total
	%		%		%		%		%		%		%
2012
New allowances net of allowance releases ...	0.58		0.07		0.37		1.16		2.31		4.36		1.00
Recoveries .................................................	(0.10)		(0.02)		(0.11)		(0.26)		(0.08)		(0.62)		(0.12)
Total charge for impairment losses ............	0.48		0.05		0.26		0.90		2.23		3.74		0.88
Amount written off net of recoveries ........	0.50		0.11		0.30		0.81		2.57		3.21		0.93
2011
New allowances net of allowance releases ...	0.59		0.11		0.38		1.46		4.01		3.54		1.34
Recoveries .................................................	(0.14)		(0.03)		(0.15)		(0.38)		(0.07)		(0.61)		(0.15)
Total charge for impairment losses ............	0.45		0.08		0.23		1.08		3.94		2.93		1.19
Amount written off net of recoveries ........	0.52		0.11		0.31		0.32		3.74		2.39		1.14

Charge for impairment losses as a percentage of average gross loans and advances to customers

(Unaudited)

	2012		2011		2010		2009		2008
	%		%		%		%		%
New allowances net of allowance releases ..........................	1.00		1.34		1.65		2.92		2.54
Recoveries ........................................................................	(0.12)		(0.15)		(0.12)		(0.10)		(0.09)
Total charge for impairment losses ...................................	0.88		1.19		1.53		2.82		2.45
Amount written off net of recoveries ...............................	0.93		1.14		2.08		2.71		1.75

Loans and advances to customers are excluded from average balances when reclassified to 'Assets held for sale'. Including these loans and advances to customers, the total new allowances net of allowance releases would be 1.00%, recoveries 0.12%, and amounts written off net of recoveries 0.93%.

Reconciliation of reported and constant currency changes by geographical region

(Unaudited)

	31 Dec 11 as reported		Currency translation adjustment21		31 Dec 11   at 31 Dec 12 exchange           rates		Movement             on a      constant      currency            basis		31 Dec 12               as reported		Reported      change22		Constant    currency      change22
	US$m		US$m		US$m		US$m		US$m		%		%
Impaired loans
Europe .......................	11,819		451		12,270		(1,125)		11,145		(6)		(9)
Hong Kong ................	608		1		609		(132)		477		(22)		(22)
Rest of Asia-Pacific ...	1,070		27		1,097		50		1,147		7		5
Middle East and North Africa ....................	2,445		(6)		2,439		35		2,474		1		1
North America ..........	22,758		17		22,775		(2,430)		20,345		(11)		(11)
Latin America ...........	3,039		(108)		2,931		257		3,188		5		9
	41,739		382		42,121		(3,345)		38,776		(7)		(8)
Impairment allowances
Europe .......................	5,292		203		5,495		(134)		5,361		1		(2)
Hong Kong ................	581		2		583		(110)		473		(19)		(19)
Rest of Asia-Pacific ...	782		17		799		(53)		746		(5)		(7)
Middle East and North Africa ........................	1,731		(5)		1,726		85		1,811		5		5
North America ..........	7,239		14		7,253		(1,637)		5,616		(22)		(23)
Latin America ...........	2,011		(114)		1,897		265		2,162		8		13
	17,636		117		17,753		(1,584)		16,169		(8)		(9)

For footnotes, see page 249.

Reconciliation of reported and constant currency impairment charge to the income statement

(Unaudited)

	31 Dec 11 as reported		Currency translation adjustment21		31 Dec 11 at 31 Dec 12    exchange           rates		Movement             on a      constant      currency            basis		31 Dec 12 as reported		Reported     change22		Constant   currency     change22
	US$m		US$m		US$m		US$m		US$m		%		%
Europe
Charge for impairment losses ........................	1,902		(47)		1,855		19		1,874		(1)		1
New allowances ........	3,033		(82)		2,951		92		3,043		0		3
Releases ...................	(560)		29		(531)		(229)		(760)		36		43
Recoveries ...............	(571)		6		(565)		156		(409)		(28)		(28)
Hong Kong
Charge for impairment losses ........................	117		-		117		(33)		84		(28)		(28)
New allowances ........	268		-		268		(44)		224		(16)		(16)
Releases ...................	(104)		-		(104)		(5)		(109)		5		5
Recoveries ...............	(47)		-		(47)		16		(31)		(34)		(34)
Rest of Asia-Pacific
Charge for impairment losses ........................	274		(1)		273		67		340		24		25
New allowances ........	681		(17)		664		13		677		(1)		2
Releases ...................	(222)		10		(212)		25		(187)		(16)		(12)
Recoveries ...............	(185)		6		(179)		29		(150)		(19)		(16)
MENA
Charge for impairment losses ........................	292		-		292		(37)		255		(13)		(13)
New allowances ........	630		-		630		(50)		580		(8)		(8)
Releases ...................	(235)		-		(235)		(15)		(250)		6		6
Recoveries ...............	(103)		-		(103)		28		(75)		(27)		(27)
North America
Charge for impairment losses ........................	7,050		-		7,050		(3,588)		3,462		(51)		(51)
New allowances ........	7,566		-		7,566		(3,677)		3,889		(49)		(49)
Releases ...................	(385)		-		(385)		87		(298)		(23)		(23)
Recoveries ...............	(131)		-		(131)		2		(129)		(2)		(2)
Latin America
Charge for impairment losses ........................	1,870		(217)		1,653		492		2,145		15		30
New allowances ........	2,421		(239)		2,182		399		2,581		7		18
Releases ...................	(162)		(24)		(186)		102		(84)		(48)		(55)
Recoveries ...............	(389)		46		(343)		(9)		(352)		(10)		3
Total
Charge for impairment losses ........................	11,505		(265)		11,240		(3,080)		8,160		(29)		(27)
New allowances ........	14,599		(338)		14,261		(3,267)		10,994		(25)		(23)
Releases ...................	(1,668)		15		(1,653)		(35)		(1,688)		1		2
Recoveries ...............	(1,426)		58		(1,368)		222		(1,146)		(20)		(16)

Concentration of exposure 

(Unaudited)

Concentrations of credit risk are described in the Appendix to Risk on page 259. An analysis of credit quality is provided on page 154.

The diversification of our lending portfolio across the regions, together with our broad range of global businesses and products, ensured that we were not overly dependent on a few countries or markets to generate income and growth in 2012. Our geographical diversification also supported our strategies for growth in faster-growing markets and those with international connectivity.

Trading assets

(Unaudited)

	2012		2011
	US$bn		US$bn
Trading securities23 ....................	213		186
Loans and advances to banks .....	78		76
Loans and advances to customers ..................................................	118		69
	409		331

For footnote, see page 249.

The largest concentration of securities held-for-trading within trading assets was in government and government agency debt securities. We had significant exposures to US Treasury and government agency securities (US$28bn) and UK (US$12bn) and Hong Kong (US$6bn) government securities. For an analysis of securities held for trading, see Note 14 on the Financial Statements.

Financial investments

Our holdings of available-for-sale government and government agency debt securities, corporate debt securities, ABSs and other securities were spread across a wide range of issuers and geographical regions, with 14% invested in securities issued by banks and other financial institutions. We also hold assets backing insurance and investment contracts. For an analysis of financial investments, see Note 20 on the Financial Statements.

Derivatives

Derivative assets were US$357bn at 31 December 2012 (2011: US$346bn), of which the largest

concentrations were interest rate and, to a lesser extent, foreign exchange derivatives. Our exposure
to derivatives increased, mainly due to a rise in the fair value of interest rate contracts following the downward movements in yield curves in major currencies, largely in Europe. However, this was partly offset by a rise in netting from an increase in trading through clearing houses coupled with the rise in fair values. For an analysis of derivatives, see Note 19 on the Financial Statements.

Loans and advances

Gross loans and advances to customers (excluding the financial sector) of US$932bn increased by US$61bn or 7% at 31 December 2012 compared with 2011, or 5% on a constant currency basis.

The following tables analyse loans by industry sector and by the location of the principal operations of the lending subsidiary or, in the case of the operations of The Hongkong and Shanghai Banking Corporation, HSBC Bank, HSBC Bank Middle East and HSBC Bank USA, by the location of the lending branch.

 

Gross loans and advances by industry sector

(Unaudited)

	2012		Currency        effect		Move-         ment		2011		2010		2009		2008
	US$m		US$m		US$m		US$m		US$m		US$m		US$m
Personal .........................................	415,093		7,741		13,727		393,625		425,320		434,206		440,227
First lien residential mortgages24 .	301,862		6,776		16,123		278,963		268,681		260,669		243,337
Other personal1 ...........................	113,231		965		(2,396)		114,662		156,639		173,537		196,890
Corporate and commercial ..............	513,493		8,376		32,301		472,816		445,512		383,090		407,474
Manufacturing .............................	112,149		1,392		14,703		96,054		91,121		80,487		81,103
International trade and services ...	169,389		2,727		13,953		152,709		146,573		115,641		128,737
Commercial real estate ................	76,760		1,544		1,275		73,941		71,880		69,389		70,969
Other property-related ................	40,532		406		587		39,539		34,838		30,520		30,739
Government ................................	10,785		184		(478)		11,079		8,594		6,689		6,544
Other commercial9 ......................	103,878		2,123		2,261		99,494		92,506		80,364		89,382
Financial .........................................	81,258		1,963		(6,924)		86,219		101,725		96,650		101,085
Non-bank financial institutions ...	79,817		1,966		(7,424)		85,275		100,163		95,237		99,536
Settlement accounts ....................	1,441		(3)		500		944		1,562		1,413		1,549
Asset-backed securities reclassified ..	3,891		208		(1,597)		5,280		5,892		7,827		7,991
Total gross loans and advances to customers ....................................	1,013,735		18,288		37,507		957,940		978,449		921,773		956,777
Gross loans and advances to banks ..	152,603		1,439		(29,948)		181,112		208,429		179,888		153,829
Total gross loans and advances (A) .	1,166,338		19,727		7,559		1,139,052		1,186,878		1,101,661		1,110,606
Impaired loans and advances ...........	38,671		379		(3,292)		41,584		46,871		30,606		25,352
- as a percentage of A ................	3.3%						4.3%		4.8%		3.3%		2.6%
Impairment allowances on loans and advances .....................................	16,112		114		(1,513)		17,511		20,083		25,542		23,909
- as a percentage of A ................	1.4%						1.8%		2.1%		2.8%		2.5%

Gross loans and advances by industry sector (continued)

	Year ended 31 December
	2012		Currency        effect		Move-         ment		2011		2010		2009		2008
	US$m		US$m		US$m		US$m		US$m		US$m		US$m
Charge for impairment losses ..........	8,160		1,558		(4,903)		11,505		13,548		24,942		24,131
New allowances net of allowance releases ...................................	9,306		1,500		(5,125)		12,931		14,568		25,832		24,965
Recoveries ..................................	(1,146)		58		222		(1,426)		(1,020)		(890)		(834)

For footnotes, see page 249.

The following commentary is on a constant currency basis (see page 179):

Personal lending was 41% of gross lending to customers at 31 December 2012. Personal lending balances of US$415bn were 3% higher than at 31 December 2011 for reasons explained under 'Personal lending' (see page 24). First lien residential mortgage lending continued to represent the Group's largest concentration in a single exposure type, the most significant balances being in the UK (42%), Hong Kong (17%) and the US (16%).

Corporate and commercial lending was 51% of gross lending to customers at 31 December 2012, representing our largest lending category. International trade and services was the biggest portion of the corporate and commercial lending category, which increased by 9% compared with 31 December 2011, mainly in Hong Kong and Rest of Asia-Pacific as we focused on corporate and commercial customers that trade internationally as well as in the UK, despite muted demand for credit. The most significant concentrations of international trade and services lending were in the UK, Hong Kong and Rest of Asia-Pacific. Our concentration in respect of the manufacturing sector increased, mainly driven by higher lending balances in Europe, due to growth in the UK of overdraft balances and corresponding customer accounts which did not meet netting criteria under accounting rules.

Commercial real estate lending represented 8% of total gross lending to customers. Lending increased marginally, as the demand for funds in property investment and development remained strong in Hong Kong. The main concentrations of commercial real estate lending were in the UK and Hong Kong.

Lending to non-bank financial institutions was US$81bn, a decrease of 8% compared with 31 December 2011 due to a decline in reverse repo balances, mainly in Europe. Our exposure was spread across a range of institutions, with the most significant concentration in the UK, France and the US.

Loans and advances to banks were widely distributed across many countries and decreased by 16% in 2012 as reverse repo balances declined, reflecting redeployment of liquidity to central banks, mainly in Europe.

The tables that follow provide information on loans and advances by geographical region and by country. The commentary on these loans and advances can be found in the 'Personal lending' and 'Wholesale lending' sections on pages 147 to 152.

Gross loans and advances to customers by industry sector and by geographical region

(Audited)

	Gross loans and advances to customers
	Europe		Hong      Kong		Rest of      Asia-    Pacific		MENA		North America		Latin America		Total	As a %      of total          gross
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		loans
At 31 December 2012
Personal .............................	186,274		70,341		49,305		6,232		84,354		18,587		415,093		41.0
First lien residential mortgages24 ................	135,172		52,296		36,906		2,144		70,133		5,211		301,862		29.8
Other personal1 ..............	51,102		18,045		12,399		4,088		14,221		13,376		113,231		11.2
Corporate and commercial .	223,061		99,199		85,305		22,452		47,886		35,590		513,493		50.6
Manufacturing ................	56,690		10,354		19,213		3,373		9,731		12,788		112,149		11.1
International trade and services ......................	70,954		33,832		32,317		9,115		13,419		9,752		169,389		16.6
Commercial real estate ...	33,279		23,384		9,286		865		6,572		3,374		76,760		7.6
Other property-related ...	7,402		16,399		6,641		2,103		7,607		380		40,532		4.0
Government ...................	2,393		2,838		1,136		1,662		774		1,982		10,785		1.1
Other commercial9 .........	52,343		12,392		16,712		5,334		9,783		7,314		103,878		10.2
Financial ............................	55,732		4,546		4,255		1,196		13,935		1,594		81,258		8.0
Non-bank financial institutions .................	55,262		4,070		3,843		1,194		13,935		1,513		79,817		7.9
Settlement accounts .......	470		476		412		2		-		81		1,441		0.1
Asset-backed securities reclassified ......................	3,694		-		-		-		197		-		3,891		0.4
Total gross loans and advances to customers (A) .......................................	468,761		174,086		138,865		29,880		146,372		55,771		1,013,735		100.0
Percentage of A by geographical region .............................	46.3%		17.2%		13.7%		2.9%		14.4%		5.5%		100.0%
Impaired loans ...................	11,080		477		1,147		2,448		20,331		3,188		38,671
- as a percentage of A ...	2.4%		0.3%		0.8%		8.2%		13.9%		5.7%		3.8%
Total impairment allowances ......................	5,321		473		746		1,794		5,616		2,162		16,112
- as a percentage of A ...	1.1%		0.3%		0.5%		6.0%		3.8%		3.9%		1.6%
At 31 December 2011
Personal .............................	166,147		63,181		43,580		5,269		95,336		20,112		393,625		41.1
First lien residential mortgages24 ................	119,902		46,817		32,136		1,837		73,278		4,993		278,963		29.1
Other personal1 ..............	46,245		16,364		11,444		3,432		22,058		15,119		114,662		12.0
Corporate and commercial .	204,984		91,592		77,887		21,152		41,271		35,930		472,816		49.3
Manufacturing ................	45,632		9,004		16,909		3,517		7,888		13,104		96,054		10.0
International trade and services ......................	64,604		29,066		29,605		8,664		10,710		10,060		152,709		15.9
Commercial real estate ...	32,099		20,828		9,537		1,002		7,069		3,406		73,941		7.7
Other property-related ...	7,595		17,367		6,396		1,770		5,729		682		39,539		4.1
Government ...................	3,143		2,918		962		1,563		656		1,837		11,079		1.2
Other commercial9 .........	51,911		12,409		14,478		4,636		9,219		6,841		99,494		10.4
Financial ............................	63,671		3,473		3,183		1,168		12,817		1,907		86,219		9.0
Non-bank financial institutions .................	63,313		3,192		2,937		1,162		12,817		1,854		85,275		8.9
Settlement accounts .......	358		281		246		6		-		53		944		0.1
Asset-backed securities reclassified ......................	4,776		-		-		-		504		-		5,280		0.6
Total gross loans and advances to customers (B) .......................................	439,578		158,246		124,650		27,589		149,928		57,949		957,940		100.0
Percentage of B by geographical region .............................	45.9%		16.5%		13.0%		2.9%		15.7%		6.0%		100.0%
Impaired loans ...................	11,751		604		1,069		2,425		22,696		3,039		41,584
- as a percentage of B ...	2.7%		0.4%		0.9%		8.8%		15.1%		5.2%		4.3%
Total impairment allowances ......................	5,242		581		782		1,714		7,181		2,011		17,511
- as a percentage of B ...	1.2%		0.4%		0.6%		6.2%		4.8%		3.5%		1.8%

For footnotes, see page 249.

Loans and advances to banks by geographical region

(Unaudited)

	Europe		Hong      Kong		Rest of      Asia-    Pacific		MENA		North America		Latin America		Loans and advances to banks	Impair-         ment allowances25
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2012 ..................	45,320		23,500		44,592		9,198		13,465		16,528		152,603		(57)
At 31 December 2011 ..................	54,406		35,159		47,309		8,571		14,831		20,836		181,112		(125)
At 31 December 2010 ..................	78,239		33,585		40,437		9,335		19,479		27,354		208,429		(158)
At 31 December 2009 ......................	65,614		36,197		35,648		8,435		15,386		18,608		179,888		(107)
At 31 December 2008 ......................	62,012		29,646		28,665		7,476		11,458		14,572		153,829		(63)

For footnote, see page 249.

Gross loans and advances to customers by country

(Unaudited)

	First lien     residential      mortgages              US$m		Other         personal              US$m		Property-            related              US$m		Commercial, international        trade and other              US$m		Total             US$m
At 31 December 2012
Europe ....................................................	135,172		51,102		40,681		241,806		468,761
UK ..........................................................	127,024		23,446		30,342		179,799		360,611
France .....................................................	2,643		10,960		8,465		42,891		64,959
Germany ..................................................	9		284		126		5,212		5,631
Malta .......................................................	1,821		563		454		1,631		4,469
Switzerland ..............................................	298		9,403		66		191		9,958
Turkey ....................................................	1,062		4,084		317		3,356		8,819
Other .......................................................	2,315		2,362		911		8,726		14,314
Hong Kong ............................................	52,296		18,045		39,783		63,962		174,086
Rest of Asia-Pacific ..............................	36,906		12,399		15,927		73,633		138,865
Australia ..................................................	10,037		1,490		2,311		7,208		21,046
India ........................................................	1,000		394		521		5,389		7,304
Indonesia .................................................	83		508		95		5,349		6,035
Mainland China .......................................	3,539		302		5,078		19,083		28,002
Malaysia ..................................................	5,025		2,175		1,813		5,880		14,893
Singapore .................................................	10,123		4,812		3,938		9,854		28,727
Taiwan ....................................................	3,323		597		120		5,180		9,220
Vietnam ...................................................	50		252		60		1,710		2,072
Other .......................................................	3,726		1,869		1,991		13,980		21,566
Middle East and North Africa (excluding Saudi Arabia) .......................	2,144		4,088		2,968		20,680		29,880
Egypt ......................................................	2		479		124		2,600		3,205
Qatar .......................................................	11		385		484		1,082		1,962
UAE ........................................................	1,743		1,822		1,533		12,264		17,362
Other .......................................................	388		1,402		827		4,734		7,351
North America ......................................	70,133		14,221		14,179		47,839		146,372
US ...........................................................	49,417		7,382		9,449		29,315		95,563
Canada .....................................................	19,040		6,444		4,136		17,369		46,989
Bermuda ..................................................	1,676		395		594		1,155		3,820
Latin America .......................................	5,211		13,376		3,754		33,430		55,771
Argentina ................................................	28		1,532		85		2,465		4,110
Brazil .......................................................	1,745		8,042		1,287		18,022		29,096
Mexico ....................................................	1,989		2,756		1,280		9,447		15,472
Panama ...................................................	1,402		1,023		1,049		2,405		5,879
Other .......................................................	47		23		53		1,091		1,214
	301,862		113,231		117,292		481,350		1,013,735

	First lien         residential         mortgages               US$m		Other           personal               US$m		Property-              related               US$m		Commercial,    international trade and other               US$m		Total              US$m
At 31 December 2011
Europe .....................................................	119,902		46,245		39,694		233,737		439,578
UK ..........................................................	111,224		22,218		29,191		160,236		322,869
France .....................................................	3,353		9,305		8,160		49,572		70,390
Germany ..................................................	10		343		112		4,518		4,983
Malta .......................................................	1,708		567		520		1,591		4,386
Switzerland ..............................................	1,803		10,684		156		1,918		14,561
Turkey ....................................................	767		2,797		255		3,652		7,471
Other .......................................................	1,037		331		1,300		12,250		14,918
Hong Kong ..............................................	46,817		16,364		38,195		56,870		158,246
Rest of Asia-Pacific .................................	32,136		11,444		15,933		65,137		124,650
Australia ..................................................	9,251		1,327		2,357		6,073		19,008
India ........................................................	830		461		809		3,914		6,014
Indonesia .................................................	81		463		97		4,577		5,218
Mainland China .......................................	2,769		317		5,078		15,665		23,829
Malaysia ..................................................	4,329		2,166		1,351		5,898		13,744
Singapore .................................................	7,919		4,108		3,690		9,433		25,150
Taiwan ....................................................	3,062		550		139		4,555		8,306
Vietnam ...................................................	42		184		42		1,397		1,665
Other .......................................................	3,853		1,868		2,370		13,625		21,716
Middle East and North Africa (excluding Saudi Arabia) .......................	1,837		3,432		2,772		19,548		27,589
Egypt ......................................................	2		441		100		2,775		3,318
Qatar .......................................................	9		445		354		1,098		1,906
UAE ........................................................	1,520		1,882		1,464		12,070		16,936
Other .......................................................	306		664		854		3,605		5,429
North America ........................................	73,278		22,058		12,798		41,794		149,928
US ...........................................................	52,484		14,087		7,850		27,307		101,728
Canada .....................................................	19,045		7,518		4,391		13,600		44,554
Bermuda ..................................................	1,749		453		557		887		3,646
Latin America .........................................	4,993		15,119		4,088		33,749		57,949
Argentina ................................................	32		1,379		114		2,331		3,856
Brazil .......................................................	1,657		9,802		1,660		18,638		31,757
Mexico ....................................................	1,847		2,261		1,284		8,210		13,602
Panama ...................................................	1,240		1,014		923		2,537		5,714
Other .......................................................	217		663		107		2,033		3,020
	278,963		114,662		113,480		450,835		957,940

 

 

END

 

 

ACSUUSSROKASRAR