Interim Report - 17 of 28

RNS Number : 9061L

HSBC Holdings PLC

16 August 2013

Renegotiated loans and forbearance

There have been no material changes to our policies and procedures regarding renegotiated loans and forbearance in the first half of 2013. In Brazil, we are reviewing local practices in order to align them with Group standard policy and we reviewed and modified the impairment allowance methodology
and the underlying assumptions used for our retail banking and Business Banking portfolios to reflect the level of restructuring that is taking place and the performance of these restructured accounts.

Current policies and procedures regarding renegotiated loans and forbearance are described on pages 158-162 of the Annual Report and Accounts 2012.

Renegotiated loans and advances to customers

	At 30 June 2013
	Neither past due nor impaired	Past due but not impaired	Impaired	Total
	US$m	US$m	US$m	US$m

Personal .............................................................................	6,953	3,299	16,008	26,260
- first lien residential mortgages ....................................	5,638	2,862	14,498	22,998
- other personal¹³ ..........................................................	1,315	437	1,510	3,262

Corporate and commercial .................................................	3,521	292	6,987	10,800
- manufacturing and international trade services ...........	1,944	75	3,190	5,209
- commercial real estate and other property-related ......	1,164	115	3,336	4,615
- governments ..............................................................	150	-	-	150
- other commercial⁸ ......................................................	263	102	461	826

Financial ............................................................................	262	16	355	633

	10,736	3,607	23,350	37,693

Total renegotiated loans and advances to customers as a percentage of total gross loans and advances to customers .............................................................................					3.8%

	At 30 June 2012				At 31 December 2012
	Neither past due nor impaired	Past due but not impaired	Impaired	Total		Neither past due nor impaired	Past due but not impaired	Impaired	Total
	US$m	US$m	US$m	US$m		US$m	US$m	US$m	US$m

Personal ......................	8,007	3,532	19,229	30,768		7,952	3,524	18,279	29,755
- first lien residential mortgages ............	5,841	2,842	16,096	24,779		5,861	2,828	15,459	24,148
- other personal¹³ ...	2,166	690	3,133	5,989		2,091	696	2,820	5,607

Corporate and commercial ..............	6,823	431	7,326	14,580		4,608	295	6,892	11,795
- manufacturing and international trade services ...............	2,904	247	2,990	6,141		2,381	154	3,012	5,547
- commercial real estate and other property-related ..	2,886	32	3,846	6,764		1,796	10	3,484	5,290
- governments .......	44	-	117	161		177	-	-	177
- other commercial⁸ ............................	989	152	373	1,514		254	131	396	781

Financial .....................	261	-	560	821		255	-	422	677

	15,091	3,963	27,115	46,169		12,815	3,819	25,593	42,227

Total renegotiated loans and advances to customers as a percentage of total gross loans and advances to customers .................................................................................				4.7%					4.2%

For footnotes, see page 178.

Renegotiated loans and advances to customers by geographical region

	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
At 30 June 2013
Personal ..................................................	2,339	231	223	165	22,600	702	26,260
- first lien residential mortgages ..........	1,806	58	70	102	20,896	66	22,998
- other personal¹³ ...............................	533	173	153	63	1,704	636	3,262

Corporate and commercial .......................	6,205	124	170	1,654	549	2,098	10,800
- manufacturing and international trade services ............................................	2,920	19	90	547	224	1,409	5,209
- commercial real estate and other property-related ...............................	3,060	3	2	805	314	431	4,615
- governments ....................................	-	-	-	1	-	149	150
- other commercial⁸ ...........................	225	102	78	301	11	109	826

Financial ..................................................	272	-	3	355	2	1	633

	8,816	355	396	2,174	23,151	2,801	37,693

Total impairment allowances on renegotiated loans ................................	1,596	14	68	424	2,694	687	5,483
- individually assessed .........................	1,579	13	49	424	124	263	2,452
- collectively assessed .........................	17	1	19	-	2,570	424	3,031

At 30 June 2012
Personal ..................................................	2,605	262	247	198	26,770	686	30,768
- first lien residential mortgages ..........	1,669	75	76	108	22,770	81	24,779
- other personal¹³ ...............................	936	187	171	90	4,000	605	5,989

Corporate and commercial .......................	9,337	157	198	2,121	755	2,012	14,580
- manufacturing and international trade services ............................................	3,643	33	134	778	206	1,347	6,141
- commercial real estate and other property-related ...............................	4,913	28	33	986	544	260	6,764
- governments ....................................	-	-	-	43	-	118	161
- other commercial⁸ ...........................	781	96	31	314	5	287	1,514

Financial ..................................................	481	-	-	330	3	7	821

	12,423	419	445	2,649	27,528	2,705	46,169

Total impairment allowances on renegotiated loans ................................	1,673	18	65	405	4,756	433	7,350
- individually assessed .........................	1,666	17	42	425	47	225	2,422
- collectively assessed .........................	7	1	23	(20)	4,709	208	4,928

At 31 December 2012
Personal ..................................................	2,817	245	248	190	25,474	781	29,755
- first lien residential mortgages ..........	1,896	68	78	112	21,896	98	24,148
- other personal¹³ ...............................	921	177	170	78	3,578	683	5,607

Corporate and commercial .......................	6,829	147	300	1,859	685	1,975	11,795
- manufacturing and international trade services ............................................	3,002	22	193	659	191	1,480	5,547
- commercial real estate and other property-related ...............................	3,641	25	37	899	486	202	5,290
- governments ....................................	-	-	-	2	-	175	177
- other commercial⁸ ...........................	186	100	70	299	8	118	781

Financial ..................................................	328	-	4	340	3	2	677

	9,974	392	552	2,389	26,162	2,758	42,227

Total impairment allowances on renegotiated loans ................................	1,547	16	96	546	3,864	485	6,554
- individually assessed .........................	1,545	15	63	543	39	213	2,418
- collectively assessed .........................	2	1	33	3	3,825	272	4,136

For footnotes, see page 178.

The following commentary is on a reported basis.

Renegotiated loans totalled US$37.7bn at 30 June 2013 (30 June 2012: US$46.2bn; 31 December 2012: US$42.2bn). The most significant portfolio of renegotiated loans remained in North America which, at 30 June 2013, amounted to US$23.2bn or 61% of the total (30 June 2012: US$27.5bn or 60%; 31 December 2012: US$26.2bn or 62%), substantially all of which were retail loans held by HSBC Finance.

Of the total renegotiated loans in North America, US$14.8bn were presented as impaired at 30 June 2013 (30 June 2012: US$17.9bn; 31 December 2012: US$17.0bn), and the ratio of total impairment allowances on renegotiated loans to renegotiated impaired loans at 30 June 2013 was 18% (30 June 2012: 27%; 31 December 2012: 23%). The reduction was due to the continued run-off of the CML portfolio, the transfer of US$750m of impaired loans to 'Assets held for sale' and improvements in housing market conditions, which had a favourable effect on impairment allowances.

The next largest portfolio of renegotiated loans was in Europe, amounting at 30 June 2013 to US$8.8bn (30 June 2012: US$12.4bn; 31 December 2012: US$10.0bn) and constituting 23% of the total (30 June 2012: 27%; 31 December 2012: 24%). Of the total renegotiated loans in Europe, US$5.8bn were presented as impaired at 30 June 2013 (30 June 2012: US$6.2bn; 31 December 2012: US$5.7bn), and the ratio of total impairment allowances on renegotiated loans to renegotiated impaired loans at 30 June 2013 remained broadly in line with the ratios at 30 June 2012 and 31 December 2012 at 28%.

Renegotiated balances in Europe were largely concentrated in the commercial real estate sector at 35% (30 June 2012: 40%; 31 December 2012: 37%) and the manufacturing and international trade service sectors 33% (30 June 2012: 29%; 31 December 2012: 30%). The reduction in commercial real estate renegotiated balances was due to repayment of loans in the UK in CMB, partly offset by increases in GB&M as a result of new cases being identified in the first half of 2013.

The balance of renegotiated loans in the Middle East and North Africa remained predominantly concentrated in the corporate and commercial sectors and balances fell by US$215m due to repayment of regulated loans in the manufacturing and international trade services and commercial real estate sectors in the UAE.

In Latin America, renegotiated loans were broadly unchanged compared with the end of 2012, though we experienced an increase in collective impairments on our restructured loan accounts in RBWM and our Business Banking portfolio in CMB, both in Brazil, as a result of impairment model changes and assumption revisions.

Forbearance in Hong Kong and Rest of Asia-Pacific remained insignificant.

HSBC Finance loan modifications and re‑ageing

Types of loan renegotiation programme in HSBC Finance

· A temporary modification is a change to the contractual terms of a loan that results in the giving up of a right to contractual cash flows over a pre-defined period. With a temporary modification the loan is expected to revert back to the original contractual terms, including the interest rate charged, after the modification period. An example is reduced interest payments.

A substantial number of HSBC Finance modifications involve interest rate reductions. These modifications lower the amount of interest income HSBC Finance is contractually entitled to receive in future periods. Historically, modifications have generally been for six months, although extended modification periods are now more common.

Loans that have been re-aged are classified as impaired with the exception of first-time loan re-ages that were less than 60 days past due at the time of re-age. These remain classified as impaired until they have demonstrated a history of payment performance against their original contracted terms for at least 12 months.

· A permanent modification is a change to the contractual terms of a loan that results in giving up a right to contractual cash flows over the life of the loan. An example is a permanent reduction in the interest rate charged.

Permanent or long-term modifications which are due to an underlying hardship event remain classified as impaired for their full life.

· The term 're-age' describes a renegotiation by which the contractual delinquency status of a loan is reset to current after demonstrating payment performance. The overdue principal and/or interest is deferred and paid at a later date. Loan re-ageing enables customers who have been unable to make a small number of payments to have their loan delinquency status reset to current so that their credit score is not affected by the overdue balances.

Loans that have been re-aged remain classified as impaired until they have demonstrated a history of payment performance against the original contractual terms for at least 12 months.

A temporary or permanent modification may also lead to a re‑ageing of a loan although a loan may be re-aged without any modification to its original terms and conditions.

Where loans have been granted multiple concessions, subject to the qualifying criteria discussed below, the concession is deemed to have been made due to concern regarding the borrower's ability to pay, and the loan is disclosed as impaired. The loan remains disclosed as impaired from that date forward until the borrower has demonstrated a history of repayment performance for the period of time required for either modifications or re-ages, as described above.

HSBC Finance maintains loan modification and re‑age ('loan renegotiation') programmes in order to manage customer relationships, improve collection opportunities and, if possible, avoid foreclosure. For further details on HSBC Finance's loan renegotiation programmes, see page 131. The volume of loans that qualify for modification has reduced significantly in recent years. We expect this trend to continue as HSBC Finance believes the percentage of its customers with unmodified loans who would benefit from loan modification in a way that would avoid non-payment of future cash flows is decreasing. In addition, volumes of new loan modifications are expected to decrease due to gradual improvements in economic conditions and the continued run-off of the CML portfolio.

Qualifying criteria

For an account to qualify for renegotiation it must meet certain criteria. However, HSBC Finance retains the right to decline a renegotiation. The extent to which HSBC Finance renegotiates accounts that are eligible under its existing policies will vary depending upon its view of prevailing economic conditions and other factors which may change from year to year. In addition, exceptions to policies and practices may be made in specific situations in response to legal or regulatory agreements or orders.

Renegotiated real estate secured and personal lending receivables are not eligible for a subsequent renegotiation for twelve or six months, respectively, with a maximum of five renegotiations permitted within a five-year period. Borrowers must be approved for a modification and generally make two minimum qualifying monthly payments within 60 days to activate a modification.

In certain circumstances where the debt has been restructured in bankruptcy proceedings, fewer or no payments may be required. Accounts whose borrowers are subject to a Chapter 13 plan filed with a bankruptcy court generally may be re-aged upon receipt of one qualifying payment, whereas accounts whose borrowers have filed for Chapter 7 bankruptcy protection may be re-aged upon receipt of a signed reaffirmation agreement. In addition, for some products, accounts may be re-aged without receipt of a payment in certain special circumstances (e.g. in the event of a natural disaster or a hardship programme).

At 30 June 2013, renegotiated real estate secured accounts represented 92% (30 June 2012: 84%; 31 December 2012: 86%) of North America's total renegotiated loans, and US$13.4bn (30 June 2012: US$15.6bn; 31 December 2012: US$14bn) of renegotiated real estate secured loans in HSBC Finance were classified as impaired.

Gross loan portfolio of HSBC Finance real estate secured balances

	Re-aged¹⁴	Modified and re-aged	Modified	Total re- negotiated loans	Total non- renegotiated loans		Total gross loans	Total impair- ment allowances	Impair- ment allowances/ gross loans
	US$m	US$m	US$m	US$m		US$m	US$m	US$m	%

30 June 2013 ............	9,237	10,796	961	20,994		15,066	36,060	3,822	11
30 June 2012 ..............	9,906	12,171	1,293	23,370		17,860	41,230	4,884	12
31 December 2012 .....	9,640	11,660	1,121	22,421		16,261	38,743	4,481	12

For footnote, see page 178.

Movement in HSBC Finance renegotiated real estate balances

	Half-year to
	30 June 2013	30 June 2012	31December 2012
	US$m	US$m	US$m

At beginning of period ............................................................................	22,421	24,588	23,371
Additions ......................................................................................................	548	579	642
Payments .....................................................................................................	(807)	(531)	(602)
Write-offs ....................................................................................................	(641)	(1,015)	(781)
Transfers and disposals .................................................................................	(527)	(250)	(209)

At end of period ......................................................................................	20,994	23,371	22,421

Number of renegotiated real estate secured accounts remaining in HSBC Finance's portfolio

	Number of renegotiated loans
	Re-aged	Modified and re-aged	Modified	Total	Total number of loans
	(000s)	(000s)	(000s)	(000s)	(000s)

30 June 2013 .........................................	113	100	10	223	408
30 June 2012 ...........................................	118	109	13	240	459
31 December 2012 ..................................	117	107	11	235	427

During the half-year to 30 June 2013, the aggregate number of renegotiated loans reduced, despite renegotiation activity continuing, due to the run-off of the portfolio. Within the constraints of our Group credit policy, HSBC Finance's policies allow for multiple renegotiations under certain circumstances, and a number of accounts received a second or further renegotiation during the year which are not duplicated in the statistics presented above. These statistics present a loan as an addition to the volume of renegotiated loans on its first renegotiation only. At 30 June 2013, renegotiated loans were 58% (30 June 2012: 57%; 31 December 2012: 58%) of HSBC Finance's real estate secured accounts.

Corporate and commercial forbearance

For the current policies and procedures regarding forbearance in the corporate and commercial sector, see page 161 in the Annual Report and Accounts 2012.

In the corporate and commercial sector, the decrease of US$1.0bn in renegotiated loans compared with the end of 2012 on a reported basis was largely driven by reductions in Europe and Middle East and North Africa, North America and Rest of Asia‑Pacific.

In Europe, the majority of the US$624m decline in renegotiated balances was in the commercial real estate sector due to net loan repayments in UK CMB and refinements in forbearance identification in Turkey.

In Middle East and North Africa, the majority of the fall of US$205m was mostly due to loan repayments in both manufacturing and international trade services and commercial real estate and other property related sectors.

In North America, the majority of the fall of US$136m was due to loan repayments in the manufacturing and international trade services sector and a large write-off in commercial real estate and other property-related commercial sector.

In the Rest of Asia-Pacific, the majority of the US$130m reduction in renegotiated loan balances was due to the transfer to Europe of one particular relationship in the manufacturing and international trade services sector, together with loan repayments in that sector and in the commercial real estate and other property-related sector.

Renegotiated balances in Latin America increased by US$123m compared with the end of 2012, primarily due to a small number of large renegotiations in the CMB commercial real estate and other property-related sector.

Impaired loans

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 its credit obligations in full, without recourse to security, or when the customer is past due 90 days or more on any material credit obligation to the HSBC Group. For further details of the CRR scale, see page 254 of the Annual Report and Accounts 2012;

· retail loans and advances classified as Expected Loss ('EL') 9 or EL 10. These grades are assigned to retail loans and advances greater than 90 days past due unless individually they have been assessed as not impaired. For further details of the EL scale see page 254 of the Annual Report and Accounts 2012;

· 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 its 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.

For loans that are assessed for impairment on a collective basis, the evidence to support reclassification as no longer impaired typically comprises a history of payment performance against the original or revised terms, depending on the nature and volume of forbearance and the credit risk characteristics surrounding the renegotiation. For loans that are assessed for impairment on an individual basis, all available evidence is assessed on a case by case basis.

In HSBC Finance, where a significant majority of HSBC's loan forbearance activity occurs, the history of payment performance is assessed with reference to the original terms of the contract, reflecting the higher credit risk characteristics of this portfolio. The payment performance periods are monitored to ensure they remain appropriate to the levels of recidivism observed within the portfolio.

Further disclosure about loans subject to forbearance is provided on page 254 of the Annual Report and Accounts 2012. Renegotiated loans and forbearance disclosures are subject to evolving industry practice and regulatory guidance.

Impaired loans and advances to customers and banks by industry sector

	Impaired loans and advances at 30 June 2013			Impaired loans and advances at 30 June 2012			Impaired loans and advances at 31 December 2012
	Individ- ually assessed	Collect- ively assessed	Total	Individ- ually assessed	Collect- ively assessed	Total	Individ- ually assessed	Collect- ively assessed	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Banks ............................	85	-	85	88	-	88	105	-	105

Customers ......................	17,610	20,510	38,120	16,973	23,771	40,744	16,771	21,900	38,671
- personal .................	2,064	20,022	22,086	2,280	23,211	25,491	2,382	21,369	23,751
- corporate and commercial ................	14,676	488	15,164	13,692	560	14,252	13,562	531	14,093
- financial .................	870	-	870	1,001	-	1,001	827	-	827


	17,695	20,510	38,205	17,061	23,771	40,832	16,876	21,900	38,776

On a reported basis, impaired loans and advances were US$38.2bn at 30 June 2013 (30 June 2012: US$40.8bn; 31 December 2012: US$38.8bn). The decrease of US$571m from the end of 2012 was due to a reduction in collectively assessed impaired balances in the US, largely driven by the continued run-off of the CML portfolio, partly offset by increases in individually assessed impaired balances in Europe and Latin America.

Impairment of loans and advances

The tables below analyse by geographical region the impairment allowances recognised for impaired loans and advances that are either individually assessed or collectively assessed, and collective impairment allowances on loans and advances classified as not impaired.

Impairment allowances on loans and advances to customers by geographical region

	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
At 30 June 2013
Gross loans and advances to customers
Individually assessed impaired loans¹⁵ (A) ............................	10,712	375	981	2,108	1,629	1,805	17,610

Collectively assessed¹⁶ (B) ........	428,065	189,691	139,056	27,507	137,907	45,107	967,333
- impaired loans¹⁵ ................	1,505	71	114	206	17,059	1,555	20,510
- non-impaired loans¹⁷ .........	426,560	189,620	138,942	27,301	120,848	43,552	946,823


Total (C) ..................................	438,777	190,066	140,037	29,615	139,536	46,912	984,943

Less: Impairment allowances (c) ..............................................	5,341	441	704	1,681	5,042	2,352	15,561
- individually assessed (a) .....	3,853	177	420	1,235	498	579	6,762
- collectively assessed (b) .....	1,488	264	284	446	4,544	1,773	8,799


Net loans and advances .............	433,436	189,625	139,333	27,934	134,494	44,560	969,382

(a) as a percentage of (A) .........	36.0%	47.2%	42.8%	58.6%	30.6%	32.1%	38.4%
(b) as a percentage of (B) ..........	0.3%	0.1%	0.2%	1.6%	3.3%	3.9%	0.9%
(c) as a percentage of (C) ..........	1.2%	0.2%	0.5%	5.7%	3.6%	5.0%	1.6%

At 30 June 2012
Gross loans and advances to customers
Individually assessed impaired loans¹⁵ (D) ............................	9,680	475	1,035	2,309	1,946	1,528	16,973

Collectively assessed¹⁶ (E) ........	440,958	165,265	129,300	27,360	158,843	53,503	975,229
- impaired loans¹⁵ ................	1,201	80	113	205	20,240	1,932	23,771
- non-impaired loans¹⁷ .........	439,757	165,185	129,187	27,155	138,603	51,571	951,458


Total (F) ..................................	450,638	165,740	130,335	29,669	160,789	55,031	992,202

Less: Impairment allowances (f) ..............................................	5,193	536	846	1,773	6,798	2,071	17,217
- individually assessed (d) .....	3,709	250	564	1,324	439	368	6,654
- collectively assessed (e) .....	1,484	286	282	449	6,359	1,703	10,563


Net loans and advances .............	445,445	165,204	129,489	27,896	153,991	52,960	974,985

(d) as a percentage of (D) .........	38.3%	52.6%	54.5%	57.3%	22.6%	24.1%	39.2%
(e) as a percentage of (E) ..........	0.3%	0.2%	0.2%	1.6%	4.0%	3.2%	1.1%
(f) as a percentage of (F) ..........	1.2%	0.3%	0.6%	6.0%	4.2%	3.8%	1.7%

At 31 December 2012
Gross loans and advances to customers
Individually assessed impaired loans¹⁵ (G) ............................	9,959	398	1,019	2,251	1,849	1,295	16,771

Collectively assessed¹⁶ (H) ........	458,802	173,688	137,846	27,629	144,523	54,476	996,964
- impaired loans¹⁵ ................	1,121	79	128	197	18,482	1,893	21,900
- non-impaired loans¹⁷ .........	457,681	173,609	137,718	27,432	126,041	52,583	975,064


Total (I) ...................................	468,761	174,086	138,865	29,880	146,372	55,771	1,013,735

Less: Impairment allowances (i)	5,321	473	746	1,794	5,616	2,162	16,112
- individually assessed (g) .....	3,781	192	442	1,323	428	406	6,572
- collectively assessed (h) ....	1,540	281	304	471	5,188	1,756	9,540


Net loans and advances .............	463,440	173,613	138,119	28,086	140,756	53,609	997,623

(g) as a percentage of (G) ..........	38.0%	48.2%	43.4%	58.8%	23.1%	31.4%	39.2%
(h) as a percentage of (H) .........	0.3%	0.2%	0.2%	1.7%	3.6%	3.2%	1.0%
(i) as a percentage of (I) ...........	1.1%	0.3%	0.5%	6.0%	3.8%	3.9%	1.6%

For footnotes, see page 178.

Net loan impairment charge to the income statement by geographical region

	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
Half-year to 30 June 2013
Individually assessed impairment allowances ..........................................	714	1	33	(58)	168	263	1,121
- new allowances ...............................	914	20	98	67	210	312	1,621
- release of allowances no longer required ..............................................	(180)	(15)	(53)	(111)	(21)	(20)	(400)
- recoveries of amounts previously written off ..........................................	(20)	(4)	(12)	(14)	(21)	(29)	(100)

Collectively assessed impairment allowances ..........................................	209	46	100	9	552	1,152	2,068
- new allowances net of allowance releases ...............................................	480	58	158	29	597	1,285	2,607
- recoveries of amounts previously written off ..........................................	(271)	(12)	(58)	(20)	(45)	(133)	(539)


Total charge for impairment losses ........	923	47	133	(49)	720	1,415	3,189
- customers .......................................	923	47	133	(49)	720	1,415	3,189


Half-year to 30 June 2012
Individually assessed impairment allowances ..........................................	654	(4)	82	105	108	158	1,103
- new allowances ...............................	988	15	129	176	193	191	1,692
- release of allowances no longer required ..............................................	(312)	(16)	(39)	(54)	(59)	(25)	(505)
- recoveries of amounts previously written off ..........................................	(22)	(3)	(8)	(17)	(26)	(8)	(84)

Collectively assessed impairment allowances ..........................................	200	41	112	30	2,048	991	3,422
- new allowances net of allowance releases ...............................................	371	54	179	54	2,103	1,145	3,906
- recoveries of amounts previously written off ..........................................	(171)	(13)	(67)	(24)	(55)	(154)	(484)


Total charge for impairment losses ........	854	37	194	135	2,156	1,149	4,525
- customers .......................................	853	37	194	135	2,156	1,149	4,524
- banks ..............................................	1	-	-	-	-	-	1


Half-year to 31 December 2012
Individually assessed impairment allowances ..........................................	733	(4)	15	100	150	42	1,036
- new allowances ...............................	972	17	110	193	187	101	1,580
- release of allowances no longer required ..............................................	(204)	(18)	(78)	(79)	(26)	(24)	(429)
- recoveries of amounts previously written off ..........................................	(35)	(3)	(17)	(14)	(11)	(35)	(115)

Collectively assessed impairment allowances ..........................................	287	51	131	20	1,156	954	2,599
- new allowances net of allowance releases ...............................................	468	63	189	40	1,193	1,109	3,062
- recoveries of amounts previously written off ..........................................	(181)	(12)	(58)	(20)	(37)	(155)	(463)


Total charge for impairment losses ........	1,020	47	146	120	1,306	996	3,635
- customers .......................................	1,021	47	146	120	1,306	996	3,636
- banks ..............................................	(1)	-	-	-	-	-	(1)

Loan impairment charges by geographical region

Loan impairment charges by industry

Loan impairment charges in the first half of 2013

On a reported basis, loan impairment allowances at 30 June 2013 were US$15.6bn, a 3% decrease compared with the end of 2012. Impaired loans were US$38.2bn, US$571m lower than the balance at 31 December 2012.

The following commentary is on a constant currency basis.

The reduction in loan impairment allowances was mainly in North America, driven by the continued run‑off of the CML portfolio and improvements in housing market conditions.

Releases and recoveries of US$1.0bn were broadly in line with the first half of 2012.

In Europe, new loan impairment allowances were US$1.4bn, a 4% increase on the first half of 2012 due to higher new collective allowances as a result of increased unsecured lending in Turkey following business expansion in the mass affluent market, and changes made to loan impairment models in respect of loss outcome and emergence periods in the UK. New individually assessed allowances decreased by US$61m due to lower new allowances in the UK, Greece and France, partly offset by an increase in Spain in the challenging economic conditions.

Impaired loans of US$12.2bn at 30 June 2013 were 15% higher than at 31 December 2012, mainly due to an increase in individually assessed loans from a small number of corporate and commercial exposures in the UK. Collectively assessed impaired loans also increased due to changes in loan impairment models, growth in the overall mortgage book in the UK and a rise in impaired loans reflecting higher credit card balances due to business expansion in RBWM in Turkey.

Releases and recoveries in Europe were US$471m, a fall of 6% compared with the first half of 2012 as the previous period benefited from higher releases, mainly in mortgages partly offset by a recovery due to the sale in unsecured lending portfolio in the UK in the first half of 2013.

In Hong Kong, new loan impairment allowances were US$78m, an increase of US$9m from the first half of 2012 due to an increase in RBWM from a revision to the collective assessment model.

Impaired loans of US$446m were 6% lower than at 31 December 2012 due to reductions in collectively assessed non-mortgage retail loans as a result of improved repayments.

Releases and recoveries in Hong Kong were US$31m, in line with in the first half of 2012.

New loan impairment allowances in Rest of Asia-Pacific fell by 17% to US$256m mainly due to the non-recurrence of certain individually assessed allowances in CMB in Australia, India and New Zealand.

Impaired loans in the region remained broadly unchanged at US$1.1bn.

Releases and recoveries in the region rose by 8%, due to a number of individual releases in Bahrain, Australia, Malaysia and mainland China, predominantly in GB&M and CMB.

In the Middle East and North Africa, new loan impairment allowances were US$96m, a decrease of US$133m due to a reduction in new individually assessed allowances as a result of the non-recurrence of certain new allowances in GB&M in the first half of 2012.

Impaired loans of US$2.3bn at 30 June 2013 were down from US$2.5bn at 31 December 2012 due to a decrease in individually assessed loans as a result of repayments.

Releases and recoveries in the region rose by 53% on the first half of 2012 to US$145m due to a small number of individual releases, primarily in GB&M, and a reduction in collectively assessed wholesale loans.

In North America, new loan impairment allowances decreased by 65% to US$807m. This was driven by reduced collectively assessed new allowances as a result of the continued run-off of the CML portfolio and the effect of significant favourable adjustments to the market value of underlying properties reflecting improvements in housing market conditions.

Impaired loans fell by 8% from the end of 2012 to US$18.7bn at 30 June 2013, driven by the reclassification of loans to 'Assets held for sale' which were previously classified as impaired and the continued run-off of the CML portfolio.

Releases and recoveries in North America fell by US$53m to US$87m for the first half of 2013, due to lower levels of repayments of impaired loans and the non-recurrence of certain releases during the first half of 2012.

In Latin America, new loan impairment allowances rose by 28% to US$1.6bn, driven by higher collectively assessed new allowances as a result of impairment model changes and assumption revisions in Brazil, on the restructured loans in portfolios in RBWM and Business Banking in CMB (see page 114), although this was offset in part by an improvement in the quality of the portfolio following the modification of credit strategies in previous periods to mitigate rising delinquency rates. Collective impairments also rose in RBWM in Mexico, reflecting the non-recurrence of a provision release in the first half of 2012, higher lending balances and a revision to the assumptions used in our collective assessment models in the first half of 2013. In addition, individually assessed provisions increased, in particular on exposures to homebuilders in CMB due to a change in external housing policy together with a specific exposure in GB&M, both in Mexico.

Impaired loans rose by 11% to US$3.4bn compared with 31 December 2012, driven by increased individually assessed loans in Mexico as a result of the impairment of loans made to homebuilders, offset in part by a net reduction in Brazil, where unsecured retail and Business Banking impaired loans decreased due to improved delinquency rates.

Releases and recoveries in Latin America remained broadly unchanged at US$182m compared with the first half of 2012.

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

	Banks	Customers
	individually assessed	Individually assessed	Collectively assessed	Total
	US$m	US$m	US$m	US$m

At 1 January 2013 .............................................................	57	6,572	9,540	16,169
Amounts written off ..........................................................	(6)	(823)	(2,614)	(3,443)
Recoveries of loans and advances previously written off ....	-	100	539	639
Charge to income statement ..............................................	-	1,121	2,068	3,189
Exchange and other movements .........................................	(1)	(208)	(734)	(943)

At 30 June 2013 ................................................................	50	6,762	8,799	15,611

Impairment allowances:
on loans and advances to customers ................................		6,762	8,799	15,561
- personal ..................................................................		586	6,798	7,384
- corporate and commercial .......................................		5,785	1,925	7,710
- financial ..................................................................		391	76	467

as a percentage of loans and advances^18,19 .......................	0.04%	0.71%	0.92%	1.45%

	US$m	US$m	US$m	US$m

At 1 January 2012 .............................................................	125	6,537	10,974	17,636
Amounts written off ..........................................................	(70)	(963)	(4,110)	(5,143)
Recoveries of loans and advances previously written off ....	-	84	484	568
Charge to income statement ..............................................	1	1,102	3,422	4,525
Exchange and other movements .........................................	-	(106)	(207)	(313)

At 30 June 2012 ................................................................	56	6,654	10,563	17,273

Impairment allowances:
on loans and advances to customers ................................		6,654	10,563	17,217
- personal ..................................................................		700	8,686	9,386
- corporate and commercial .......................................		5,341	1,809	7,150
- financial ..................................................................		613	68	681

as a percentage of loans and advances^18,19 .......................	0.04%	0.71%	1.12%	1.60%

	US$m	US$m	US$m	US$m

At 1 July 2012 ...................................................................	56	6,654	10,563	17,273
Amounts written off ..........................................................	-	(1,398)	(3,271)	(4,669)
Recoveries of loans and advances previously written off ....	-	115	463	578
Charge to income statement ..............................................	(1)	1,037	2,599	3,635
Exchange and other movements²⁰ ......................................	2	164	(814)	(648)

At 31 December 2012 ........................................................	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 advances^18,19 .......................	0.09%	0.71%	1.20%	1.67%

For footnotes, see page 178.

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

	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Total
	%	%	%	%	%	%	%
Half-year to 30 June 2013
New allowances net of allowance releases ..............	0.64	0.07	0.29	(0.10)	1.10	6.10	0.83
Recoveries .............................	(0.15)	(0.02)	(0.10)	(0.23)	(0.09)	(0.63)	(0.14)

Total charge for impairment losses .................................	0.49	0.05	0.19	(0.33)	1.01	5.47	0.69

Amount written off net of recoveries ..........................	0.33	0.08	0.17	0.36	1.36	3.68	0.61

Half-year to 30 June 2012
New allowances net of allowance releases ..............	0.55	0.07	0.42	1.26	2.89	4.59	1.12
Recoveries .............................	(0.10)	(0.02)	(0.12)	(0.29)	(0.10)	(0.57)	(0.13)

Total charge for impairment losses .................................	0.45	0.05	0.30	0.97	2.79	4.02	0.99

Amount written off net of recoveries ..........................	0.47	0.10	0.18	0.53	3.20	3.01	0.99

Half-year to 31 December 2012
New allowances net of allowance releases ..............	0.62	0.07	0.33	1.08	1.76	4.17	0.90
Recoveries .............................	(0.11)	(0.02)	(0.11)	(0.24)	(0.06)	(0.67)	(0.12)

Total charge for impairment losses .................................	0.51	0.05	0.22	0.84	1.70	3.50	0.78

Amount written off net of recoveries ..........................	0.53	0.13	0.41	1.10	1.97	3.44	0.87

Loans and advances to customers are excluded from average balances when reclassified to 'Assets held for sale'.

Reconciliation of reported and constant currency changes by geographical region

	31 Dec 12 as reported	Currency translation adjustment²¹	31 Dec 12 at 30 Jun 13 exchange rates	Movement on a constant currency basis	30 Jun 13 as reported	Reported change²²	Constant currency change²²
	US$m	US$m	US$m	US$m	US$m	%	%
Impaired loans
Europe ...................................	11,145	(525)	10,620	1,646	12,266	10	15
Hong Kong ............................	477	-	477	(31)	446	(6)	(6)
Rest of Asia-Pacific ...............	1,147	(61)	1,086	9	1,095	(5)	1
Middle East and North Africa .	2,474	(8)	2,466	(130)	2,336	(6)	(5)
North America .......................	20,345	(45)	20,300	(1,598)	18,702	(8)	(8)
Latin America ........................	3,188	(165)	3,023	337	3,360	5	11

	38,776	(804)	37,972	233	38,205	(1)	1

Impairment allowances
Europe ...................................	5,361	(251)	5,110	264	5,374	-	5
Hong Kong ............................	473	-	473	(32)	441	(7)	(7)
Rest of Asia-Pacific ...............	746	(38)	708	(4)	704	(6)	(1)
Middle East and North Africa .	1,811	(12)	1,799	(101)	1,698	(6)	(6)
North America .......................	5,616	(23)	5,593	(551)	5,042	(10)	(10)
Latin America ........................	2,162	(134)	2,028	324	2,352	9	16

	16,169	(458)	15,711	(100)	15,611	(3)	(1)

For footnotes, see page 178.

Concentration of exposure

Concentrations of credit risk are described in the Appendix to Risk on page 259 of the Annual Report and Accounts 2012.

The geographical diversification of our lending portfolio and our broad range of global businesses and products ensured that we did not overly depend on a few markets to generate growth in the first half of 2013. This diversification also supported our strategies for growth in faster-growing regions and markets with international connectivity. An analysis of credit quality is provided on page 124.

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 15% invested in securities issued by banks and other financial institutions and 70% in government or quasi-government debt. We also hold assets backing insurance and investment contracts. For an analysis of financial investments, see Note 12 on the Financial Statements.

Trading assets

	At 30 Jun	At 30 Jun	At 31 Dec
	2013	2012	2012
	US$bn	US$bn	US$bn

Trading securities²³........	218	191	213
Loans and advances to banks .........................	97	95	78
Loans and advances to customers ..................	118	105	118

	433	391	409

For footnote, see page 178.

The largest concentration of securities held within trading assets was in government and government agency debt securities. We had significant exposures to US Treasury and government agency securities (US$30.2bn) and UK (US$11.2bn) and Hong Kong (US$7.2bn) government securities. For an analysis of securities held for trading, see Note 7 on the Financial Statements. The majority of trading loans and advances relate to reverse repos.

Derivatives

Derivative assets were US$299bn at 30 June 2013 (31 December 2012: US$357bn), of which the largest concentrations were interest rate and, to a lesser extent, foreign exchange derivatives. Our exposure to derivatives decreased by 16% as upward movements in yield curves in major currencies led to a decline in the fair value of interest rate contracts, largely in Europe, although this was partly offset by a reduction in netting. For an analysis of derivatives, see Note 11 on the Financial Statements.

Loans and advances

Gross loans and advances to customers (excluding the financial sector) of US$908bn at 30 June 2013 decreased by US$24.7bn compared with 31 December 2012 on a reported basis. On a constant currency basis they were US$6.2bn higher.

Gross loans and advances by industry sector

	At 31 December 2012	Currency effect	Movement	At 30 June 2013
	US$m	US$m	US$m	US$m

Personal .............................................................................	415,093	(14,171)	(6,413)	394,509
- first lien residential mortgages⁴ ...................................	301,862	(10,802)	(1,412)	289,648
- other personal¹³ ..........................................................	113,231	(3,369)	(5,001)	104,861

Corporate and commercial .................................................	513,493	(16,516)	12,828	509,805
- manufacturing ............................................................	112,149	(4,385)	(6,172)	101,592
- international trade and services ..................................	169,389	(5,198)	10,235	174,426
- commercial real estate ................................................	76,760	(2,190)	(1,100)	73,470
- other property-related ................................................	40,532	(669)	791	40,654
- government ................................................................	10,785	(205)	(2,083)	8,497
- other commercial⁸ ......................................................	103,878	(3,869)	11,157	111,166

Financial ............................................................................	81,258	(2,610)	(1,485)	77,163
- non-bank financial institutions ...................................	79,817	(2,548)	(2,492)	74,777
- settlement accounts ....................................................	1,441	(62)	1,007	2,386

Asset-backed securities reclassified .....................................	3,891	(216)	(209)	3,466

Total gross loans and advances to customers (A)²⁴ .............	1,013,735	(33,513)	4,721	984,943

Gross loans and advances to banks ......................................	152,603	(3,766)	36,335	185,172

Total gross loans and advances ...........................................	1,166,338	(37,279)	41,056	1,170,115

Impaired loans and advances to customers ..........................	38,671	(800)	249	38,120
- as a percentage of (A) ................................................	3.8%			3.9%

Impairment allowances on loans and advances to customers .......................................................................................	16,112	815	(1,366)	15,561
- as a percentage of (A) ................................................	1.6%			1.6%

	Half-year to 30 June 2012			Half-year to 30 June 2013
	US$m			US$m

Charge for impairment losses in the period ........................	4,525	(670)	(666)	3,189
- new allowances net of allowance releases ....................	5,093	(108)	(1,157)	3,828
- recoveries ...................................................................	(568)	(562)	491	(639)

For footnotes, see page 178.

The following commentary is on a constant currency basis:

Personal lending was 40% of gross lending to customers at 30 June 2013. Personal lending balances of US$395bn were broadly in line with 31 December 2012 for reasons explained under 'Personal lending' (see page 116). 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 (18%) and the US (16%).

Corporate and commercial lending was 52% of gross lending to customers at 30 June 2013, representing our largest lending category. International trade and services was the biggest portion of the corporate and commercial lending category, which increased by 6% compared with 31 December 2012, driven by a significant rise in term and trade-related lending to CMB and GB&M customers in Hong Kong and Rest of Asia-Pacific.

Commercial real estate lending represented 7% of total gross lending to customers, which was broadly unchanged from December 2012. The main concentrations of commercial real estate lending were in the UK and Hong Kong.

Lending to non-bank financial institutions was US$77bn, a reduction of 2% compared with 31 December 2012 due to a decline in reverse repo activity in Europe and North America, partly offset by higher reverse repo balances in Hong Kong. Our exposure was spread across a range of institutions, with the most significant in the UK, France and the US.

Loans and advances to banks were widely distributed across many countries and increased by 24% from the relatively low level seen in December 2012. This was driven by higher customer demand for reverse repo funding in Europe, and higher placements with financial institutions in Hong Kong and Rest of Asia-Pacific.

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. The commentary on these loans and advances can be found in the 'Personal lending' and 'Wholesale lending' sections on pages 116 and 121, respectively.

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

	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 30 June 2013
Personal ........................................	173,270	72,288	48,534	6,377	78,959		15,081		394,509			40.0
- first lien residential mortgages⁴ ...................................................	127,434	53,475	36,605	2,296	66,277		3,561		289,648			29.4
- other personal¹³ .....................	45,836	18,813	11,929	4,081	12,682		11,520		104,861			10.6

Corporate and commercial ............	211,128	111,610	86,873	21,416	48,327		30,451		509,805			51.8
- manufacturing ........................	46,202	10,944	19,300	3,409	9,609		12,128		101,592			10.3
- international trade and services ...................................................	66,317	42,707	35,091	9,458	13,082		7,771		174,426			17.7
- commercial real estate ...........	30,764	24,158	9,258	898	6,064		2,328		73,470			7.5
- other property-related ...........	7,403	17,182	6,533	1,526	7,725		285		40,654			4.1
- government ...........................	1,834	2,813	407	1,664	348		1,431		8,497			0.9
- other commercial⁸ .................	58,608	13,806	16,284	4,461	11,499		6,508		111,166			11.3

Financial .......................................	51,060	6,168	4,630	1,822	12,103		1,380		77,163			7.8
- non-bank financial institutions ...................................................	49,526	5,563	4,475	1,821	12,103		1,289		74,777			7.6
- settlement accounts ...............	1,534	605	155	1	-		91		2,386			0.2

Asset-backed securities reclassified .	3,319	-	-	-	147		-		3,466			0.4

Total gross loans and advances to customers (A)²⁴ ...........................	438,777	190,066	140,037	29,615	139,536		46,912		984,943			100.0

Percentage of (A) by geographical region .........................................	44.5%	19.3%	14.2%	3.0%	14.2%		4.8%		100%

Impaired loans ...............................	12,217	446	1,095	2,314	18,688		3,360		38,120
- as a percentage of (A) .............	2.8%	0.1%	0.8%	7.8%	13.4%		7.2%		3.9%
-....
Total impairment allowances ........	5,341	441	704	1,681	5,042		2,352		15,561
- as a percentage of (A) .............	1.2%	0.2%	0.5%	5.7%	3.6%		5.0%		1.6%

At 30 June 2012
Personal ........................................	173,650	65,669	45,409	6,015	91,611	18,448		400,802			40.4
- first lien residential mortgages⁴ ...................................................	125,729	48,951	33,636	1,937	71,582	4,945		286,780			28.9
- other personal¹³ .....................	47,921	16,718	11,773	4,078	20,029	13,503		114,022			11.5

Corporate and commercial ............	214,423	96,164	81,029	22,216	43,540	34,829		492,201			49.6
- manufacturing ........................	55,245	10,235	17,550	3,888	8,594	12,538		108,050			10.9
- international trade and services ...................................................	64,843	31,631	30,777	8,574	11,471	9,399		156,695			15.8
- commercial real estate ...........	32,563	21,510	9,544	940	6,706	3,451		74,714			7.5
- other property-related ...........	7,506	17,079	6,849	2,060	6,120	344		39,958			4.0
- government ...........................	2,073	2,906	390	1,514	774	1,853		9,510			1.0
- other commercial⁸ .................	52,193	12,803	15,919	5,240	9,875	7,244		103,274			10.4

Financial .......................................	58,322	3,907	3,897	1,438	25,237	1,754		94,555			9.5
- non-bank financial institutions ...................................................	57,460	3,413	3,492	1,433	25,186	1,547		92,531			9.3
- settlement accounts ...............	862	494	405	5	51	207		2,024			0.2

Asset-backed securities reclassified .	4,243	-	-	-	401	-		4,644			0.5

Total gross loans and advances to customers (B)²⁴ ...........................	450,638	165,740	130,335	29,669	160,789	55,031		992,202			100.0

Percentage of (B) by geographical region .........................................	45.5%	16.7%	13.1%	3.0%	16.2%	5.5%		100.0%

Impaired loans ...............................	10,881	555	1,148	2,514	22,186	3,460		40,744
- as a percentage of (B) .............	2.4%	0.3%	0.9%	8.5%	13.8%	6.3%		4.1%
-....
Total impairment allowances ........	5,193	536	846	1,773	6,798	2,071		17,217
- as a percentage of (B) .............	1.2%	0.3%	0.6%	6.0%	4.2%	3.8%		1.7%

	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 mortgages⁴ .......................	135,172	52,296	36,906	2,144	70,133	5,211	301,862		29.8
- other personal¹³ ...........	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 commercial⁸ ........	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 (C)²⁴ .................................	468,761	174,086	138,865	29,880	146,372	55,771	1,013,735		100.0

Percentage of (C) 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 (C) ..	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 (C) ..	1.1%	0.3%	0.5%	6.0%	3.8%	3.9%	1.6%

For footnotes, see page 178.

Loans and advances to banks by geographical region

	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Total	Impair- ment allowances²⁵
	US$m	US$m	US$m	US$m	US$m	US$m	US$m		US$m

At 30 June 2013 .........................	68,281	33,293	48,965	9,454	11,818	13,361	185,172		(50)
At 30 June 2012 ...........................	58,652	29,673	50,228	9,512	14,528	19,654	182,247		(56)
At 31 December 2012 ..................	45,320	23,500	44,592	9,198	13,465	16,528	152,603		(57)

For footnote, see page 178.

Gross loans and advances to customers by country

	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 30 June 2013
Europe .....................................................	127,434	45,836	38,167		227,340	438,777
UK .......................................................	120,740	20,395	28,615		170,490	340,240
France ..................................................	2,563	11,533	7,775		37,595	59,466
Germany ..............................................	6	193	126		5,488	5,813
Malta ...................................................	1,848	531	454		1,560	4,393
Switzerland ...........................................	350	8,506	94		288	9,238
Turkey .................................................	952	4,152	280		3,908	9,292
Other ...................................................	975	526	823		8,011	10,335

Hong Kong ..............................................	53,475	18,813	41,340		76,438	190,066

Rest of Asia-Pacific .................................	36,605	11,929	15,791		75,712	140,037
Australia ..............................................	9,183	1,284	2,064		6,350	18,881
India ....................................................	1,060	360	455		4,959	6,834
Indonesia .............................................	81	526	104		5,592	6,303
Mainland China ....................................	4,210	285	5,226		22,678	32,399
Malaysia ..............................................	5,079	2,027	1,900		5,917	14,923
Singapore .............................................	9,999	4,840	4,060		10,980	29,879
Taiwan .................................................	3,495	631	107		4,500	8,733
Vietnam ...............................................	52	251	76		1,552	1,931
Other ...................................................	3,446	1,725	1,799		13,184	20,154

Middle East and North Africa (excluding Saudi Arabia) .......................	2,296	4,081	2,424		20,814	29,615
Egypt ...................................................	1	479	150		2,455	3,085
Qatar ...................................................	10	379	263		1,000	1,652
UAE ....................................................	1,879	1,826	1,391		12,457	17,553
Other ...................................................	406	1,397	620		4,902	7,325

North America ........................................	66,277	12,682	13,789		46,788	139,536
US ........................................................	47,186	6,805	9,532		28,539	92,062
Canada .................................................	17,455	5,540	3,679		17,071	43,745
Bermuda ...............................................	1,636	337	578		1,178	3,729

Latin America .........................................	3,561	11,520	2,613		29,218	46,912
Argentina .............................................	25	1,487	66		2,340	3,918
Brazil ...................................................	1,715	7,052	1,193		17,715	27,675
Mexico ................................................	1,821	2,981	1,336		8,440	14,578
Panama ................................................	-	-	-		205	205
Other ...................................................	-	-	18		518	536


	289,648	104,861	114,124		476,310	984,943

At 30 June 2012
Europe .....................................................	125,729	47,921	40,069		236,919	450,638
UK .......................................................	116,949	21,807	30,021		165,913	334,690
France ..................................................	3,244	9,436	8,067		49,885	70,632
Germany ..............................................	8	355	104		5,108	5,575
Malta ...................................................	1,710	546	480		1,563	4,299
Switzerland ...........................................	312	8,885	86		126	9,409
Turkey .................................................	989	3,550	296		3,665	8,500
Other ...................................................	2,517	3,342	1,015		10,659	17,533

Hong Kong ..............................................	48,951	16,718	38,589		61,482	165,740

Rest of Asia-Pacific .................................	33,636	11,773	16,393		68,533	130,335
Australia ..............................................	9,528	1,415	2,477		6,504	19,924
India ....................................................	866	436	584		4,818	6,704
Indonesia .............................................	83	479	85		5,048	5,695
Mainland China ....................................	3,021	302	5,425		17,092	25,840
Malaysia ..............................................	4,630	2,076	1,592		5,871	14,169
Singapore .............................................	8,745	4,448	3,921		9,938	27,052
Taiwan .................................................	3,189	581	123		3,381	7,274
Vietnam ...............................................	43	205	44		1,537	1,829
Other ...................................................	3,531	1,831	2,142		14,344	21,848

	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 30 June 2012 (continued)
Middle East and North Africa (excluding Saudi Arabia) .......................	1,937	4,078	3,000		20,654	29,669
Egypt ...................................................	2	466	100		2,900	3,468
Qatar ...................................................	11	423	466		1,244	2,144
UAE ....................................................	1,573	1,830	1,556		11,452	16,411
Other ...................................................	351	1,359	878		5,058	7,646

North America ........................................	71,582	20,029	12,826		56,352	160,789
US ........................................................	50,773	12,405	8,015		39,241	110,434
Canada .................................................	19,071	7,214	4,160		16,072	46,517
Bermuda ...............................................	1,738	410	651		1,039	3,838

Latin America .........................................	4,945	13,503	3,795		32,788	55,031
Argentina .............................................	31	1,459	105		2,239	3,834
Brazil ...................................................	1,678	8,479	1,220		18,024	29,401
Mexico ................................................	1,898	2,531	1,360		8,906	14,695
Panama ................................................	1,307	1,015	1,049		2,550	5,921
Other ...................................................	31	19	61		1,069	1,180


	286,780	114,022	114,672		476,728	992,202

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

This information is provided by RNS

The company news service from the London Stock Exchange

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