Annual Financial Report - 30 of 60

RNS Number : 1578D

HSBC Holdings PLC

25 March 2014

 



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 2013 ..	5,361		473		746		1,811		5,616		2,162		16,169
Amounts written off ...................................	(2,180)		(187)		(373)		(195)		(1,610)		(2,110)		(6,655)
Personal ...................................................	(876)		(152)		(309)		(107)		(1,330)		(1,593)		(4,367)
- first lien residential mortgages ............	(83)		-		(7)		(2)		(779)		(25)		(896)
- other personal1 ...................................	(793)		(152)		(302)		(105)		(551)		(1,568)		(3,471)
Corporate and commercial .......................	(1,264)		(32)		(64)		(78)		(277)		(514)		(2,229)
- manufacturing and international trade and services .........................................	(680)		(30)		(43)		(64)		(80)		(386)		(1,283)
- commercial real estate and other property-related ..................................	(289)		-		(7)		(2)		(141)		(23)		(462)
- other commercial10 .............................	(295)		(2)		(14)		(12)		(56)		(105)		(484)
Financial2 .................................................	(40)		(3)		-		(10)		(3)		(3)		(59)
Recoveries of amounts written off in previous years ........................................................	637		35		132		87		123		282		1,296
Personal ...................................................	584		31		122		41		82		237		1,097
- first lien residential mortgages ............	25		3		1		-		67		23		119
- other personal1 ...................................	559		28		121		41		15		214		978
Corporate and commercial .......................	52		4		10		46		41		45		198
- manufacturing and international trade and services .........................................	19		4		3		2		6		27		61
- commercial real estate and other property-related ..................................	6		-		4		-		18		1		29
- other commercial10 .............................	27		-		3		44		17		17		108
Financial2 .................................................	1		-		-		-		-		-		1
Charge to income statement .......................	1,732		135		348		(44)		1,235		2,642		6,048
Personal ...................................................	320		140		205		46		963		1,522		3,196
- first lien residential mortgages ............	(11)		(8)		1		(13)		647		11		627
- other personal1 ...................................	331		148		204		59		316		1,511		2,569
Corporate and commercial .......................	1,467		8		144		(13)		253		1,115		2,974
- manufacturing and international trade and services .........................................	800		33		101		37		125		594		1,690
- commercial real estate and other property-related ..................................	432		(4)		2		(5)		79		322		826
- other commercial10 .............................	235		(21)		41		(45)		49		199		458
Financial2 .................................................	(55)		(13)		(1)		(77)		19		5		(122)
Exchange and other movements19 ..............	48		(7)		(88)		(76)		(1,122)		(412)		(1,657)
At 31 December 2013 ..............................	5,598		449		765		1,583		4,242		2,564		15,201
Impairment allowances against banks:
- individually assessed .............................	35		-		-		18		5		-		58
Impairment allowances against customers:
- individually assessed .............................	4,019		174		460		1,131		410		878		7,072
- collectively assessed18 ..........................	1,544		275		305		434		3,827		1,686		8,071
At 31 December 2013 ..............................	5,598		449		765		1,583		4,242		2,564		15,201

Movement in impairment allowances by industry sector and by geographical region (continued)

(Unaudited)

(U	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 commercial10 ...............................	(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 commercial10 ...............................	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 commercial10 ...............................	433		(9)		15		27		96		93		655
Financial2 ...................................................	(21)		2		4		29		(18)		-		(4)
Exchange and other movements19 ................	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 assessed18 ............................	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

For footnotes, see page 263.

Movement in impairment allowances over 5 years

(Unaudited)

	2013		2012		2011		2010		2009
	US$m		US$m		US$m		US$m		US$m
Impairment allowances at 1 January .................................	16,169		17,636		20,241		25,649		23,972
Amounts written off .........................................................	(6,655)		(9,812)		(12,480)		(19,300)		(24,840)
Personal ........................................................................	(4,367)		(6,905)		(10,431)		(16,458)		(22,703)
- first lien residential mortgages ................................	(896)		(2,059)		(2,662)		(4,163)		(4,704)
- other personal1 ......................................................	(3,471)		(4,846)		(7,769)		(12,295)		(17,999)
Corporate and commercial ............................................	(2,229)		(2,677)		(2,009)		(2,789)		(1,984)
- manufacturing and international trade and services .	(1,283)		(1,610)		(1,137)		(1,050)		(1,093)
- commercial real estate and other property-related .	(462)		(506)		(392)		(1,280)		(327)
- other commercial10 ................................................	(484)		(561)		(480)		(459)		(564)
Financial2 ......................................................................	(59)		(230)		(40)		(53)		(153)
Recoveries of amounts written off in previous years .........	1,296		1,146		1,426		1,020		890
Personal ........................................................................	1,097		966		1,175		846		712
- first lien residential mortgages ................................	119		140		86		93		61
- other personal1 ......................................................	978		826		1,089		753		651
Corporate and commercial ............................................	198		172		242		156		170
- manufacturing and international trade and services .	61		59		135		92		123
- commercial real estate and other property-related .	29		41		20		21		9
- other commercial10 ................................................	108		72		87		43		38
Financial2 ......................................................................	1		8		9		18		8
Charge to income statement .............................................	6,048		8,160		11,505		13,548		24,942
Personal ........................................................................	3,196		5,362		9,318		11,187		19,781
- first lien residential mortgages ................................	627		1,910		4,103		3,461		4,185
- other personal1 ......................................................	2,569		3,452		5,215		7,726		15,596
Corporate and commercial ............................................	2,974		2,802		2,114		2,198		4,711
- manufacturing and international trade and services .	1,690		1,457		901		909		2,392
- commercial real estate and other property-related .	826		690		764		660		1,492
- other commercial10 ................................................	458		655		449		629		827
Financial2 ......................................................................	(122)		(4)		73		163		450
Exchange and other movements19 ....................................	(1,657)		(961)		(3,056)		(676)		685
At 31 December ...............................................................	15,201		16,169		17,636		20,241		25,649
Impairment allowances against banks:
- individually assessed ...................................................	58		57		125		158		107
Impairment allowances against customers:
- individually assessed ...................................................	7,072		6,572		6,537		6,457		6,494
- collectively assessed ...................................................	8,071		9,540		10,974		13,626		19,048
At 31 December ...............................................................	15,201		16,169		17,636		20,241		25,649

For footnotes, see page 263.

 

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
At 1 January 2013 ...............................................	57		6,572		9,540		16,169
Amounts written off  ...........................................	(4)		(1,937)		(4,714)		(6,655)
Recoveries of loans and advances previously written off ......................................................	-		209		1,087		1,296
Charge to income statement ................................	5		2,315		3,728		6,048
Exchange and other movements19 .......................	-		(87)		(1,570)		(1,657)
At 31 December 2013 .......................................	58		7,072		8,071		15,201
Impairment allowances on loans and advances to customers .......................................................			7,072		8,071		15,143
-  personal .......................................................			589		6,013		6,602
-  corporate and commercial ...........................			6,096		1,963		8,059
-  financial ......................................................			387		95		482
	%		%		%		%
As a percentage of loans and advances20,21 .......	0.05		0.70		0.80		1.35
	US$m		US$m		US$m		US$m
At 1 January 2012 ...............................................	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 movements19 .......................	2		58		(1,021)		(961)
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 advances20,21 .......	0.05		0.67		0.98		1.48

For footnotes, see page 263.

 

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

(Unaudited)

	2013						2012
	Individually    assessed         US$m		Collectively    assessed         US$m		Total         US$m		Individually      assessed          US$m		Collectively      assessed          US$m		Total          US$m
Banks ..........................................................	5		-		5		-		-		-
Personal ......................................................	49		3,147		3,196		96		5,266		5,362
-  first lien residential mortgages .............	27		600		627		40		1,870		1,910
-  other personal1 ....................................	22		2,547		2,569		56		3,396		3,452
Corporate and commercial ..........................	2,414		560		2,974		2,029		773		2,802
-  manufacturing and international trade and services ......................................	1,265		425		1,690		910		547		1,457
-  commercial real estate and other property-related ...............................	791		35		826		604		86		690
-  other commercial10 ..............................	358		100		458		515		140		655
Financial .....................................................	(148)		21		(127)		14		(18)		(4)
Total charge to income statement ...............	2,320		3,728		6,048		2,139		6,021		8,160

For footnotes, see page 263.

Net loan impairment charge to the income statement

(Unaudited)

	2013		2012		2011		2010		2009
	US$m		US$m		US$m		US$m		US$m
Individually assessed impairment allowances .....................	2,320		2,139		1,915		2,625		4,458
-  new allowances ..........................................................	3,440		3,272		2,904		3,617		5,173
-  release of allowances no longer required ....................	(911)		(934)		(798)		(847)		(581)
-  recoveries of amounts previously written off ............	(209)		(199)		(191)		(145)		(134)
Collectively assessed impairment allowances .....................	3,728		6,021		9,590		10,923		20,484
-  new allowances net of allowance releases ...................	4,815		6,968		10,825		11,798		21,240
-  recoveries of amounts previously written off ............	(1,087)		(947)		(1,235)		(875)		(756)
Total charge for impairment losses ...................................	6,048		8,160		11,505		13,548		24,942
-  banks ........................................................................	5		-		(16)		12		70
-  customers .................................................................	6,043		8,160		11,521		13,536		24,872
At 31 December
Impaired loans ..................................................................	36,503		38,776		41,739		47,064		30,845
Impairment allowances .....................................................	15,201		16,169		17,636		20,241		25,649

Charge for impairment losses as a percentage of average gross loans and advances to customers by geographical region²²

(Unaudited)

	Europe		Hong      Kong		Rest of      Asia-    Pacific		MENA		North America		Latin America		Total
	%		%		%		%		%		%		%
2013
New allowances net of allowance releases ...	0.59		0.09		0.34		0.15		0.91		5.93		0.78
Recoveries .................................................	(0.16)		(0.02)		(0.09)		(0.29)		(0.08)		(0.57)		(0.14)
Total charge for impairment losses ............	0.43		0.07		0.25		(0.14)		0.83		5.36		0.64
Amount written off net of recoveries ........	0.39		0.08		0.17		0.38		1.00		3.68		0.56
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

Charge for impairment losses as a percentage of average gross loans and advances to customers²²

(Unaudited)

	2013		2012		2011		2010		2009
	%		%		%		%		%
New allowances net of allowance releases ..........................	0.78		1.00		1.34		1.65		2.92
Recoveries ........................................................................	(0.14)		(0.12)		(0.15)		(0.12)		(0.10)
Total charge for impairment losses ...................................	0.64		0.88		1.19		1.53		2.82
Amount written off net of recoveries ...............................	0.56		0.93		1.14		2.08		2.71

For footnote, see page 263.

Reconciliation of reported and constant currency changes by geographical region

(Unaudited)

	31 Dec 12 as reported		Currency translation adjustment23		31 Dec 12   at 31 Dec 13 exchange           rates		Movement    - constant      currency            basis		31 Dec 13               as reported		Reported     change24		Constant   currency     change24
	US$m		US$m		US$m		US$m		US$m		%		%
Impaired loans
Europe .......................	11,145		231		11,376		1,852		13,228		19		16
Hong Kong ................	477		-		477		(32)		445		(7)		(7)
Rest of Asia-Pacific ...	1,147		(78)		1,069		109		1,178		3		10
Middle East and North Africa ....................	2,474		(6)		2,468		(183)		2,285		(8)		(7)
North America ..........	20,345		(54)		20,291		(5,168)		15,123		(26)		(25)
Latin America ...........	3,188		(291)		2,897		1,347		4,244		33		46
	38,776		(198)		38,578		(2,075)		36,503		(6)		(5)
Impairment allowances
Europe .......................	5,361		82		5,443		155		5,598		4		3
Hong Kong ................	473		-		473		(24)		449		(5)		(5)
Rest of Asia-Pacific ...	746		(56)		690		75		765		3		11
Middle East and North Africa ........................	1,811		(10)		1,801		(218)		1,583		(13)		(12)
North America ..........	5,616		(27)		5,589		(1,347)		4,242		(24)		(24)
Latin America ...........	2,162		(236)		1,926		638		2,564		19		33
	16,169		(247)		15,922		(721)		15,201		(6)		(5)

For footnotes, see page 263.

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

(Unaudited)

	31 Dec 12 as reported		Currency translation adjustment23		31 Dec 12 at 31 Dec 13    exchange           rates		Movement    - constant      currency            basis		31 Dec 13 as reported		Reported     change24		Constant   currency     change24
	US$m		US$m		US$m		US$m		US$m		%		%
Charge for impairment losses
Europe .........................	1,874		(8)		1,866		(134)		1,732		(8)		(7)
-  new allowances .....	3,043		(30)		3,013		69		3,082		1		2
-  releases .................	(760)		11		(749)		36		(713)		(6)		(5)
-  recoveries .............	(409)		11		(398)		(239)		(637)		56		60
Hong Kong ..................	84		-		84		51		135		61		61
-  new allowances .....	224		(1)		223		75		298		33		34
-  releases .................	(109)		1		(108)		(20)		(128)		17		19
-  recoveries .............	(31)		-		(31)		(4)		(35)		13		13
Rest of Asia-Pacific .....	340		(14)		326		22		348		2		7
-  new allowances .....	677		(22)		655		-		655		(3)		-
-  releases .................	(187)		5		(182)		7		(175)		(6)		(4)
-  recoveries .............	(150)		3		(147)		15		(132)		(12)		(10)
Middle East and North Africa .......................	255		(5)		250		(294)		(44)
-  new allowances .....	580		(4)		576		(168)		408		(30)		(29)
-  releases .................	(250)		-		(250)		(115)		(365)		46		46
-  recoveries .............	(75)		(1)		(76)		(11)		(87)		16		14
North America .............	3,462		(5)		3,457		(2,222)		1,235		(64)		(64)
-  new allowances .....	3,889		(5)		3,884		(2,244)		1,640		(58)		(58)
-  releases .................	(298)		1		(297)		15		(282)		(5)		(5)
-  recoveries .............	(129)		(1)		(130)		7		(123)		(5)		(5)
Latin America ..............	2,145		(165)		1,980		662		2,642		23		33
-  new allowances .....	2,581		(188)		2,393		869		3,262		26		36
-  releases .................	(84)		5		(79)		(259)		(338)		302		328
-  recoveries .............	(352)		18		(334)		52		(282)		(20)		(16)
Total ...........................	8,160		(197)		7,963		(1,915)		6,048		(26)		(24)
-  new allowances .....	10,994		(250)		10,744		(1,399)		9,345		(15)		(13)
-  releases .................	(1,688)		23		(1,665)		(336)		(2,001)		19		20
-  recoveries .............	(1,146)		30		(1,116)		(180)		(1,296)		13		16

For footnotes, see page 263.

Concentration of exposure 

(Unaudited)

Concentrations of credit risk are described in the Appendix to Risk on page 273.

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 2013. This diversification also supported our strategy for growth in faster-growing markets and in those with international connectivity.

An analysis of credit quality is provided on page 169.

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 in 2013, with 13% invested in securities issued by banks and other financial institutions and 73% in government or government agency debt securities. We also held assets backing insurance and investment contracts.

For an analysis of financial investments, see Note 19 on the Financial Statements.

Trading assets

Trading assets

(Unaudited)

	2013		2012
	US$bn		US$bn
Trading securities25 ....................	163		171
Loans and advances to banks .....	28		78
Loans and advances to customers ..................................................	48		118
	239		367

For footnote, see page 263.

Trading securities remained the largest concentration within trading assets at 68% compared with 47% in 2012. This increase was due to a change in the way GB&M manage reverse repo activities, which led to a significant reduction in these balances in loans and advances to banks and customers. The largest concentration within the trading securities portfolio was in government and government agency debt securities. We had significant exposures to US Treasury and government agency debt securities (US$23bn) and UK (US$12bn) and Hong Kong (US$6bn) government debt securities.

For an analysis of debt and equity securities held for trading, see Note 14 on the Financial Statements.

Derivatives

Derivative assets were US$282bn at 31 December 2013 (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 21% 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 18 on the Financial Statements.

Loans and advances

Gross loans and advances to customers (excluding the financial sector) of US$957bn at 31 December 2013 increased by US$25bn or 3% compared with the end of 2012 on a reported basis. On a constant currency basis they were US$30bn higher.

The following tables analyse loans and advances 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)

	2013		Currency        effect		Move-         ment		2012		2011		2010		2009
	US$m		US$m		US$m		US$m		US$m		US$m		US$m
Personal .........................................	410,728		(2,949)		(1,416)		415,093		393,625		425,320		434,206
-  first lien residential mortgages26 ................................................	299,875		(735)		(1,252)		301,862		278,963		268,681		260,669
-  other personal1 .......................	110,853		(2,214)		(164)		113,231		114,662		156,639		173,537
Corporate and commercial ..............	543,822		(2,758)		33,087		513,493		472,816		445,512		383,090
-  manufacturing .........................	113,925		(1,070)		2,846		112,149		96,054		91,121		80,487
-  international trade and services ................................................	185,081		(993)		16,685		169,389		152,709		146,573		115,641
-  commercial real estate ............	74,846		189		(2,103)		76,760		73,941		71,880		69,389
-  other property-related ............	44,832		(222)		4,522		40,532		39,539		34,838		30,520
-  government ............................	7,342		(81)		(3,362)		10,785		11,079		8,594		6,689
-  other commercial10 .................	117,796		(581)		14,499		103,878		99,494		92,506		80,364
Financial .........................................	138,181		1,009		55,914		81,258		86,219		101,725		96,650
-  non-bank financial institutions	136,195		1,076		55,302		79,817		85,275		100,163		95,237
-  settlement accounts ................	1,986		(67)		612		1,441		944		1,562		1,413
Asset-backed securities reclassified ..	2,716		84		(1,259)		3,891		5,280		5,892		7,827
Total gross loans and advances to customers (A) .............................	1,095,447		(4,614)		86,326		1,013,735		957,940		978,449		921,773
Gross loans and advances to banks ..	211,579		(2,421)		61,397		152,603		181,112		208,429		179,888
Total gross loans and advances .......	1,307,026		(7,035)		147,723		1,166,338		1,139,052		1,186,878		1,101,661
Of which:
-  reverse repos to customers ......	88,215		799		52,765		34,651		41,419		60,519		58,913
-  reverse repos to banks .............	91,475		(388)		56,402		35,461		41,909		66,402		63,332
Impaired loans and advances to customers ....................................	36,428		(198)		(2,045)		38,671		41,584		46,871		30,606
- as a percentage of A ................	3.3%						3.8%		4.3%		4.8%		3.3%
Impairment allowances on loans and advances to customers .................	15,143		(246)		(723)		16,112		17,511		20,083		25,542
- as a percentage of A ................	1.4%						1.6%		1.8%		2.1%		2.8%
Charge for impairment losses ..........	6,048		(197)		(1,915)		8,160		11,505		13,548		24,942
-  new allowances net of allowance releases ................................	7,344		(227)		(1,735)		9,306		12,931		14,568		25,832
-  recoveries ...............................	(1,296)		30		(180)		(1,146)		(1,426)		(1,020)		(890)

For footnotes, see page 263.

The following commentary is on a constant currency basis.

Personal lending balances of US$411bn represented 38% of gross lending to customers at 31 December 2013. This was a reduction of US$1.4bn compared with 31 December 2012. First lien residential mortgage lending continued to represent our largest concentration in a single exposure type, the most significant balances being in the UK (44%), Hong Kong (18%) and the US (14%).

Corporate and commercial lending was 50% of gross lending to customers at 31 December 2013, representing our largest lending category. International trade and services, which comprised the largest portion of the corporate and commercial lending category, increased by 10% compared with
31 December 2012. This was due to continued demand for financing by customers in Hong Kong and, to a lesser extent, in Rest of Asia-Pacific.

Commercial real estate lending was 7% of total gross lending to customers, broadly unchanged from 31 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$138bn, an increase of US$56bn compared with 31 December 2012 mainly due to a change in the way GB&M manages reverse repo activities, and increased lending to other financial services companies in Hong Kong. Our exposure was spread across a range of institutions, with the most significant exposures being in the UK, France and the US.

Loans and advances to banks were widely distributed across many countries and increased by 41% from 31 December 2012. This was driven by a change in the way GB&M manage reverse repo activities, and higher placements with financial institutions in Hong Kong.

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 under 'Personal lending' and 'Wholesale lending' on pages 160 and 165, respectively.

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 2013
Personal ...................................	192,107		73,556		50,973		6,484		72,690		14,918		410,728		37.5
-  first lien residential mortgages26 ......................	140,474		53,762		38,285		2,451		60,955		3,948		299,875		27.4
-  other personal1 .................	51,633		19,794		12,688		4,033		11,735		10,970		110,853		10.1
Corporate and commercial ........	239,529		114,832		89,066		19,760		50,447		30,188		543,822		49.7
-  manufacturing ...................	55,920		11,582		19,176		3,180		11,853		12,214		113,925		10.4
-  international trade and services .............................	77,113		43,041		36,327		8,629		11,676		8,295		185,081		16.9
-  commercial real estate ......	31,326		25,358		9,202		639		5,900		2,421		74,846		6.8
-  other property-related ......	7,308		19,546		7,601		1,333		8,716		328		44,832		4.1
-  government ......................	3,340		739		282		1,443		564		974		7,342		0.7
-  other commercial10 ...........	64,522		14,566		16,478		4,536		11,738		5,956		117,796		10.8
Financial ...................................	75,550		7,610		8,522		2,532		42,591		1,376		138,181		12.6
-  non-bank financial institutions .......................	73,993		7,353		8,449		2,532		42,591		1,277		136,195		12.4
-  settlement accounts ..........	1,557		257		73		-		-		99		1,986		0.2
Asset-backed securities reclassified ............................	2,578		-		-		-		138		-		2,716		0.2
Total gross loans and advances to customers (A) ...................	509,764		195,998		148,561		28,776		165,866		46,482		1,095,447		100.0
Of which:
-  reverse repos .....................	48,091		1,991		4,457		-		33,676		-		88,215		8.1
Percentage of A by geographical region ...................................	46.5%		17.9%		13.6%		2.6%		15.2%		4.2%		100.0%
Impaired loans ..........................	13,187		445		1,178		2,265		15,109		4,244		36,428
- as a percentage of A ..........	2.6%		0.2%		0.8%		7.9%		9.1%		9.1%		3.3%
Total impairment allowances ....	5,563		449		765		1,565		4,237		2,564		15,143
- as a percentage of A ..........	1.1%		0.2%		0.5%		5.4%		2.6%		5.5%		1.4%

Gross loans and advances to customers by industry sector and by geographical region (continued)
(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 mortgages26 ........................	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 commercial10 ............	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 (B) .........................	468,761		174,086		138,865		29,880		146,372		55,771		1,013,735		100.0
Of which:
-  reverse repos ......................	27,299		760		307		-		6,281		4		34,651		3.4
Percentage of B 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 B ...........	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 B ...........	1.1%		0.3%		0.5%		6.0%		3.8%		3.9%		1.6%

For footnotes, see page 263.

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 allowances27
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2013 ..................	73,904		35,150		50,637		6,443		30,164		15,281		211,579		(58)
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)

For footnote, see page 263.

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 2013
Europe ..................................................	140,474		51,633		38,634		279,023		509,764
UK28 ......................................................	132,174		22,913		28,127		219,248		402,462
France ....................................................	2,661		13,840		8,442		38,333		63,276
Germany ................................................	7		218		127		6,361		6,713
Malta .....................................................	2,007		526		434		1,627		4,594
Switzerland .............................................	364		8,616		269		320		9,569
Turkey ...................................................	833		4,002		305		4,059		9,199
Other .....................................................	2,428		1,518		930		9,075		13,951
Hong Kong ...........................................	53,762		19,794		44,904		77,538		195,998
Rest of Asia-Pacific .............................	38,285		12,688		16,803		80,785		148,561
Australia ................................................	9,468		1,236		2,511		7,138		20,353
India ......................................................	1,080		297		425		4,732		6,534
Indonesia ...............................................	69		447		78		5,361		5,955
Mainland China ......................................	4,880		300		5,808		22,178		33,166
Malaysia ................................................	5,140		1,994		1,997		5,420		14,551
Singapore ...............................................	10,283		5,754		3,953		12,188		32,178
Taiwan ...................................................	3,797		660		158		5,198		9,813
Vietnam .................................................	55		264		53		1,464		1,836
Other .....................................................	3,513		1,736		1,820		17,106		24,175
Middle East and North Africa (excluding Saudi Arabia) ......................	2,451		4,033		1,972		20,320		28,776
Egypt .....................................................	1		477		146		2,232		2,856
Qatar .....................................................	13		377		261		1,245		1,896
UAE ......................................................	2,082		1,842		1,331		12,344		17,599
Other .....................................................	355		1,337		234		4,499		6,425
North America .....................................	60,955		11,735		14,616		78,560		165,866
US28 .......................................................	42,317		6,257		10,174		59,150		117,898
Canada ...................................................	17,036		5,116		3,912		18,557		44,621
Bermuda .................................................	1,602		362		530		853		3,347
Latin America .....................................	3,948		10,970		2,749		28,815		46,482
Argentina ...............................................	20		1,425		62		2,103		3,610
Brazil .....................................................	1,811		6,466		1,268		17,132		26,677
Mexico ..................................................	2,117		3,079		1,398		8,994		15,588
Other .....................................................	-		-		21		586		607
	299,875		110,853		119,678		565,041		1,095,447

Gross loans and advances to customers by country (continued) 

(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

 

 

END

 

 

ACSUVVVRSUAOUAR