HK & Shanghai Bk Pt 2/3

HSBC Holdings PLC
05 March 2007


Additional Information

1. Net interest income

                                                            Year ended   Year ended
Figures in HK$m                                                31Dec06      31Dec05

Net interest income                                             51,099       43,491
Average interest-earning assets                              2,212,521    2,031,314
Net interest spread                                               1.92%        1.89%
Net interest margin                                               2.31%        2.14%

Net interest income of HK$51,099 million was HK$7,608 million, or 17.5 per cent,
higher than in 2005. The contribution from balance sheet growth and improved
deposit spreads throughout the region was partially offset by significantly
lower balance sheet management income.

Net interest income in Personal Financial Services rose by HK$3,289 million, or
12.3 per cent, partly due to improved liability spreads earned in the higher
interest rate environment, coupled with strong growth in the deposit base.
Lending growth also contributed to the increase in interest income, particularly
personal loans in India and Korea, credit cards in the Philippines, India and
Indonesia, and mortgages in Singapore, Taiwan and at Hang Seng Bank. In
addition, strong returns were also generated on investments held by the group's
insurance companies, benefiting from higher yields and growth in portfolio size.
Net interest income in Commercial Banking was HK$2,917 million, or 26.3 per
cent, ahead of the prior period due to balance sheet growth, notably in Hong
Kong, India, Singapore and mainland China, and improved deposit spreads. In
Corporate, Investment Banking and Markets, net interest income from Global
Transaction Banking increased significantly, due to higher deposit balances and
spreads, notably in Hong Kong and India. Global Markets saw a decline in balance
sheet management revenues, which were impacted by higher funding costs and flat
yield curves.

Average interest-earning assets rose by HK$181.2 billion, or 8.9 per cent, to
HK$2,212.5 billion. Average advances to customers grew by HK$82.4 billion, or
8.5 per cent, with strong increases in corporate loans in Hong Kong, India,
mainland China and Australia, and rises in mortgage lending in Hong Kong,
Singapore, Korea, Taiwan and India. Average credit card balances rose in all
areas, notably Hong Kong, the Philippines, Indonesia and India, and personal
instalment loans grew, most significantly in Korea. Average placements with
banks were HK$56.2 billion higher, and holdings of financial investments rose by
HK$43.4 billion, reflecting the deployment of the commercial surplus.

The group's net interest margin of 2.31 per cent for 2006 was 17 basis points
higher than in 2005. The reduction in balance sheet management income negatively
affected margin by 11 basis points when compared to 2005. However, net interest
spread improved by three basis points overall, attributable to tactical deposit
pricing. The contribution from net free funds increased by 14 basis points
reflecting higher interest rates and an increase in free funds from retained
earnings and trading book structured deposits, although other net trading
liabilities decreased.

For the bank in Hong Kong, net interest margin increased by nine basis points to
2.26 per cent for 2006. Spread rose by three basis points, benefiting from
higher interest rates. Spreads on Hong Kong dollar and foreign currency current
and savings accounts improved as the value of funds rose, whilst increases in
interest rates paid to customers were contained. This was partly offset by the
negative impact of lower balance sheet management income as fixed rate asset
positions faced an increase in funding costs. Spreads on mortgages and credit
cards were also affected by a higher cost of funds, and competitive pressures on
pricing affected corporate lending margins. The contribution from net free funds
increased by six basis points due to the increase in market interest rates.

At Hang Seng Bank, net interest margin improved by 23 basis points as the
increase in contribution from net free funds outweighed the fall in spread. Net
interest spread declined by 11 basis points as returns on treasury balance sheet
management portfolios were affected by rising funding costs and flat yield
curves, and spreads narrowed on mortgages and corporate loans due to competitive
pressures on pricing. These outweighed the favourable impact of the growth in
advances and a wider spread between the bank's best lending rate ('BLR') and
HIBOR. The contribution from net free funds increased by 34 basis points,
benefiting from the rise in market interest rates and from higher balances of
structured deposits which are classified as trading liabilities, the related
interest expense being included within 'Net trading income'.

In the rest of Asia-Pacific, net interest margin at 2.16 per cent was 16 basis
points higher than in 2005. Spread increased by nine basis points to 1.94 per
cent. All major sites faced an increase in funding costs due to higher interest
rates across the region, but spreads rose in several countries, notably in India
due to an increase in higher-yielding personal loans and credit cards and a rise
in low cost current account balances from custody and clearing customers.
Margins also rose in mainland China from higher spreads on corporate lending as
deposit rate rises lagged lending rate increases, in Singapore due to rises in
mortgage lending rates, and in Australia from higher yields on corporate bonds.
These increases were partially offset by lower spreads on credit card advances
in Taiwan and competitive pressures on mortgage lending rates in Korea. The
contribution from net free funds rose by seven basis points, benefiting from
higher market interest rates.

2. Net fee income

Figures in HK$m                                                   2006         2005

Account services                                                 1,501        1,314
Credit facilities                                                1,245        1,159
Import/export                                                    2,956        2,777
Remittances                                                      1,437        1,248
Securities/stockbroking                                          5,267        3,402
Cards                                                            4,335        4,231
Insurance                                                          315          280
Unit trusts                                                      2,326        1,627
Funds under management                                           2,974        2,233
Other                                                            4,198        3,400

Fee income                                                      26,554       21,671

Fee expense                                                     (4,150)      (3,574)

                                                                22,404       18,097

Net fee income was HK$4,307 million, or 23.8 per cent, higher than in 2005.
Securities broking and custody fees rose by 54.8 per cent, reflecting higher
stock market turnover in Hong Kong and the region, with increases from both
personal and corporate customers. The buoyant equity markets also stimulated
customer demand for unit trusts and structured products. Funds under management
and related fees increased, in part due to institutional business transferred
from another HSBC Group entity in the second quarter of 2005. Fee income also
includes significant fund advisory and performance fees, reflecting the success
of certain emerging markets funds. Trade finance income and remittance and other
account fees grew, reflecting the group's strong transactional capabilities.
Hong Kong Mandatory Provident Fund management fees increased by 34 per cent due
to new business and improved investment performance. Gross fee income from
credit cards was impacted by a loss of revenues in Taiwan as credit card
activity fell in the wake of the country's curbs on consumer credit growth, and
due to the transfer of the majority of the merchant acquiring business to a
joint venture company set up with Global Payments Inc. However, there was strong
growth elsewhere in the region due to an increase in the number of cards in
circulation and higher cardholder spending. 'Other' fees include an increase in
sales credits received from fellow HSBC group companies in respect of treasury
business.

Fee expense rose due to increased brokerage fees paid by Global Markets on
account of higher trading activity, and higher investment management advisory
fees paid to another HSBC Group company.

3. Net trading income

Figures in HK$m                                                   2006         2005

Dealing profits                                                 10,001        8,560

Gain/(loss) from hedging activities                                 16           (1)

Net interest expense                                            (1,307)      (1,484)

Dividend income from trading securities                            208          105

                                                                 8,918        7,180

Trading income rose by 24.2 per cent to HK$8,918 million. Foreign exchange
profits benefited from an increase in trading activity against a backdrop of
increasing demand for local currency assets as foreign investors sought to
participate in local stock markets, coupled with favourable positioning as the
US dollar weakened. Revenues grew strongly in the equities and equity
derivatives business, reflecting business expansion and buoyant stock markets.
Strong gains were also made on the revaluation of private equity investments.
However, the contribution from structured derivatives trading declined, and the
rising interest rate environment negatively impacted corporate bond trading
revenues. Net interest expense decreased due to higher interest income from
increased holdings of trading assets, but was largely offset by a rise in
interest expense from the increase in structured deposit products issued to
retail customers.

4. Gains less losses from financial investments

Figures in HK$m                                                   2006         2005

Profit on disposal of available-for-sale securities              1,466          762

Other                                                                -           (6)

                                                                 1,466          756

The profit on the disposal of available-for-sale securities largely comprises
the gain on the disposal of part of the group's stake in UTI Bank, reducing the
group's interest to 4.99 per cent. Profits were also made on the sale of
Philippine government securities and other operational investments.

5. Other operating income

Figures in HK$m                                                   2006         2005

Rental income from investment properties                           196          215
Movement in present value of in-force insurance business         1,124        1,185
Gains on investment properties                                     475        1,167
Profit on disposal of property, plant and equipment, and
  assets held for sale                                             981          111
Profit on disposal of subsidiaries, associates and
  business portfolios                                              904           53
Surplus arising on property revaluation                             70          370
Other                                                            1,903        1,796

                                                                 5,653        4,897

Other operating income for 2006 included gains on the disposal of the
stockbroking, margin lending and broker originated mortgage businesses in
Australia, a gain on the transfer of the credit card merchant acquiring business
to a joint venture company set up with Global Payments Inc., and profits on the
sale of property in Hong Kong and Japan.

Gains on investment properties comprise unrealised revaluation gains, together
with realised profits on disposals. Gains were lower than in 2005 as valuations
were affected by a slowdown in property price rises in Hong Kong.

The surplus arising on property revaluation represents reversals of prior year
revaluation deficits that had arisen when the value of certain premises fell
below depreciated historical cost. This was lower than in 2005 as the number of
properties with revaluation deficits decreased.

'Other' largely comprises recoveries from fellow HSBC group companies of IT and
other operating costs incurred on their behalf.

6. Insurance income

Included in the consolidated income statement are the following revenues earned
by the group's insurance businesses:

Figures in HK$m                                                   2006         2005

Net interest income                                              2,328        1,715
Net fee income                                                     636          484
Net income from financial instruments designated at
  fair value                                                     2,980           16
Gains less losses from financial investments                        29           53
Dividend income                                                      1            2
Net earned insurance premiums                                   21,846       19,340
Movement in present value of in-force business                   1,124        1,185
Other operating income                                              72           90
                                                                29,016       22,885
Net insurance claims incurred and movement in
  policyholders' liabilities                                   (22,480)     (17,291)

Net operating income                                             6,536        5,594

Premium income rose by HK$2,506 million, or 13.0 per cent, over 2005, primarily
attributable to growth in the life assurance business in Hong Kong. The product
range was expanded with the launch of new retirement and other investment-linked
products. Investment income was higher, reflecting the growing portfolio size,
higher interest yields and improved equity returns. Fee income rose due to the
increased portfolio size and improved investment performance of the Hong Kong
Mandatory Provident Fund business. The movement in the present value of in-force
business fell, despite a rise in premium income, due to a change in product mix
which comprised an increase in shorter-term policies. Claims and movement in
policyholders' liabilities comprise returns owed to investment policyholders as
well as general insurance claims. The increase is largely in line with the rise
in premium income and investment income.

7. Loan impairment charges and other credit risk provisions

Figures in HK$m                                                   2006         2005

Net charge for impairment of customer advances

- Individually assessed impairment allowances:
  New allowances                                                 1,314        2,129
  Releases                                                        (869)      (1,755)
  Recoveries                                                      (212)        (267)
                                                                   233          107
- Net charge for collectively assessed
  impairment allowances                                          4,468        1,961
                                                                 4,701        2,068

Net charge/(release) of other credit risk provisions               108           (4)

Net charge for loan impairment and other credit risk
  provisions                                                     4,809        2,064

The net charge for loan impairment and other credit risk provisions was HK$2,745
million higher than in 2005. The environment for corporate credit remained
stable in contrast to more difficult credit conditions for personal lending in
some parts of the region.

The charge for new individually assessed allowances was lower, attributable to a
decrease in charges against corporate lending, as the prior period included a
significant one-time charge. Releases and recoveries were also lower, largely
relating to corporates in Hong Kong and the region, and against mortgage lending
in Hong Kong.

The net charge for collectively assessed allowances rose significantly, due to
higher charges against credit card lending, most notably in Taiwan and
Indonesia. Delinquency rates and write-offs rose in Taiwan largely as a result
of government measures to curb excessive consumer credit growth. These included
increasing the minimum monthly repayment amount, while at the same time
introducing a debt renegotiation scheme which offers extended repayment periods
at substantially reduced rates. Indonesia was also affected by higher minimum
repayment rules, coupled with rises in inflation largely as a result of the
reduction of government fuel price subsidies. Elsewhere, volume growth in credit
cards and other personal lending, coupled with the non-recurrence of releases in
2005, also contributed to the increase.

Other credit risk provisions include an impairment charge against an
available-for-sale equity investment in Taiwan.

8. Employee compensation and benefits

Figures in HK$m                                                   2006         2005

Wages, salaries and other costs                                 14,302       12,311
Performance-related pay                                          5,501        4,117
Social security costs                                              283          238
Retirement benefit costs                                           956        1,070
                                                                21,042       17,736

Staff numbers by region^
                                                            At 31Dec06   At 31Dec05

Hong Kong                                                       26,496       24,842
Rest of Asia-Pacific                                            27,518       25,956
Americas/Europe                                                     17           18
Total                                                           54,031       50,816

^ Full-time equivalent

Staff costs increased by HK$3,306 million, or 18.6 per cent, compared with 2005.
Salaries rose by 16.2 per cent, reflecting increased headcount and annual salary
increments. Staff numbers rose in Hong Kong in support of the implementation of
the five-day working week and extended weekend opening hours. In the rest of
Asia-Pacific region, headcount grew in support of new branch openings,
establishment of the consumer finance business, and expansion of the sales force
and call centres. Ownership of the group service centre in Guangdong was
transferred to another HSBC Group entity with a resultant decrease in headcount
of around 3,500 in the rest of Asia-Pacific region. Performance-related pay in
Hong Kong and the rest of Asia-Pacific increased in line with improved operating
revenues, higher dealing income and the increase in headcount.

9. General and administrative expenses

Figures in HK$m                                                   2006         2005

Premises and equipment
- Rental expenses                                                1,557        1,243
- Amortisation of prepaid operating lease payments                  58           56
- Other premises and equipment                                   2,463        2,089
                                                                 4,078        3,388

Marketing and advertising expenses                               3,587        2,840

Other administrative expenses                                    7,268        5,554

Litigation and other provisions                                     16          313

                                                                14,949       12,095

The increase in general and administrative expenses of HK$2,854 million, or 23.6
per cent, reflected additional costs incurred in business expansion throughout
the region. Premises costs rose due to new branch openings, expansion of office
space and rent increases. Advertising and marketing expenditure was higher,
notably in Hong Kong, India, Korea and mainland China, and comprised specific
product campaigns, particularly in Personal Financial Services, and other drives
to increase brand awareness. Technology costs also increased as the group
continued to invest in enhanced channel capabilities and improved portfolio
management systems.

10. Share of profit in associates and joint venture

Share of profit in associates and joint venture principally included the group's
share of post-tax profits from Bank of Communications and Industrial Bank, and
amortisation of intangible assets arising on acquisition.

11. Tax expense

The tax expense in the consolidated income statement comprises:

Figures in HK$m                                                   2006         2005

Current income tax
- Hong Kong profits tax                                          5,506        4,974
- Overseas taxation                                              3,955        2,598
Deferred taxation                                                  (50)         479
                                                                 9,411        8,051

The effective rate of tax for 2006 was 18.1 per cent compared with 17.8 per cent
in 2005. The increase was attributable to a higher proportion of the group's
taxable profits being generated in higher tax rate jurisdictions, particularly
India, Japan and Australia.

12. Dividends

                                                                      2006              2005
                                                                  HK$     HK$m         HK$     HK$m
                                                            per share            per share

Dividends paid on ordinary share capital
- in respect of the previous financial year,
  approved and paid during the year                              0.50    4,500        0.53    4,800
- in respect of the current financial year                       1.58   14,257        1.76   15,800
                                                                 2.08   18,757        2.29   20,600

The Directors have declared a fourth interim dividend in respect of the
financial year ending 31 December 2006 of HK$6,500 million (HK$0.72 per ordinary
share).

13. Advances to customers

Figures in HK$m                                             At 31Dec06   At 31Dec05

Gross advances to customers                                  1,050,625    1,005,902

Impairment allowances
- Individually assessed                                         (2,118)     (2,976)
- Collectively assessed                                         (4,725)     (3,600)
                                                                (6,843)     (6,576)
                                                             1,043,782     999,326

Allowances as a percentage of gross advances
  to customers:
Individually assessed                                             0.20%       0.29%
Collectively assessed                                             0.45%       0.36%
Total allowances                                                  0.65%       0.65%

14. Impairment allowances against advances to customers

                                                            Individually   Collectively
                                                                assessed       assessed
Figures in HK$m                                               allowances     allowances    Total

At 1Jan06                                                          2,976          3,600    6,576
Amounts written off                                               (1,196)        (3,830)  (5,026)
Recoveries of advances written off in previous years                 212            498      710
Net charge to income statement (Note 7)                              233          4,468    4,701
Unwinding of discount of loan impairment                             (85)          (111)    (196)
Exchange and other adjustments                                       (22)           100       78

At 31Dec06                                                         2,118          4,725    6,843

15. Impaired advances to customers and allowances

The geographical information shown below, and in notes 16, 17, 18 and 20, has
been classified by location of the principal operations of the subsidiary
company or, in the case of the bank, by location of the branch responsible for
advancing the funds.

                                                                             Rest of   Americas/
Figures in HK$m                                             Hong Kong   Asia-Pacific      Europe    Total

Year ended 31Dec06

Impairment allowance charge                                     1,228          3,473           -    4,701

At 31Dec06

Advances to customers which are considered to be impaired are as follows:

Gross impaired advances                                         3,530          5,071           -    8,601

Individually assessed allowances                               (1,016)        (1,102)          -   (2,118)
                                                                2,514          3,969           -    6,483

Individually assessed allowances
  as a percentage of gross
  impaired advances                                              28.8%          21.7%          -     24.6%

Gross impaired advances as a
  percentage of gross advances to
  customers                                                       0.6%           1.2%          -      0.8%

Year ended 31Dec05

Impairment allowance charge/(release)                           1,156            924         (12)   2,068

At 31Dec05

Advances to customers which are considered to be impaired are as follows:

Gross impaired advances                                         3,920          3,079           -    6,999

Individually assessed allowances                               (1,345)        (1,631)          -   (2,976)
                                                                2,575          1,448           -    4,023

Individually assessed allowances
  as a percentage of gross
  impaired advances                                              34.3%          53.0%          -     42.5%

Gross impaired advances as a
  percentage of gross advances to
  customers                                                       0.6%           0.8%          -      0.7%

Impaired advances to customers are those advances where objective evidence
exists that full repayment of principal or interest is considered unlikely.

The individually assessed allowances are made after taking into account the
value of collateral in respect of such advances.

16. Overdue advances to customers

                                                                             Rest of
Figures in HK$m                                             Hong Kong   Asia-Pacific   Total

At 31Dec06

Gross advances to customers which have
  been overdue with respect to either
  principal or interest for periods of:

- three to six months                                             938          1,287   2,225

- six months to one year                                          384            595     979

- over one year                                                 1,238            859   2,097
                                                                2,560          2,741   5,301

Overdue advances to customers as a
  percentage of gross advances to
  customers:

- three to six months                                             0.1%           0.3%    0.2%

- six months to one year                                          0.1%           0.1%    0.1%

- over one year                                                   0.2%           0.2%    0.2%
                                                                  0.4%           0.6%    0.5%

At 31Dec05

Gross advances to customers which have
  been overdue with respect to either
  principal or interest for periods of:

- three to six months                                           1,073            891   1,964

- six months to one year                                          272            430     702

- over one year                                                 1,053          1,071   2,124
                                                                2,398          2,392   4,790

Overdue advances to customers as a
  percentage of gross advances to
  customers:

- three to six months                                             0.2%           0.2%    0.2%

- six months to one year                                            -            0.1%    0.1%

- over one year                                                   0.2%           0.3%    0.2%
                                                                  0.4%           0.6%    0.5%

17. Rescheduled advances to customers

                                                                             Rest of
Figures in HK$m                                             Hong Kong   Asia-Pacific   Total

At 31Dec06

Rescheduled advances to customers                               1,730          2,307   4,037

Rescheduled advances to customers as a
  percentage of gross advances to
  customers                                                       0.3%           0.6%    0.4%

At 31Dec05

Rescheduled advances to customers                               1,941            623   2,564

Rescheduled advances to customers as a
  percentage of gross advances to
  customers                                                       0.3%           0.2%    0.3%

Rescheduled advances to customers are those advances which have been
restructured or renegotiated because of a deterioration in the financial
position of the borrower or because of the inability of the borrower to meet the
original repayment schedule.

Rescheduled advances to customers are stated net of any advances which have
subsequently become overdue for more than three months and which are included in
'Overdue advances to customers' (Note 16).

The increase in rescheduled advances since the end of 2005 was largely
attributable to the credit card and personal loan balances under the
government's debt negotiation scheme in Taiwan.

18. Analysis of advances to customers based on categories used by the HSBC Group

The following analysis of advances to customers is based on categories used by
the HSBC Group, including The Hongkong and Shanghai Banking Corporation Limited
and its subsidiary companies, to manage associated risks.

                                                                             Rest of   Americas/
Figures in HK$m                                             Hong Kong   Asia-Pacific      Europe       Total

At 31Dec06

Residential mortgages                                         191,522        112,900           5     304,427

Hong Kong SAR Government's Home
  Ownership Scheme, Private Sector
  Participation Scheme and Tenants
  Purchase Scheme mortgages                                    31,708              -           -      31,708

Credit card advances                                           31,315         19,999           -      51,314

Other personal                                                 30,778         35,908           1      66,687
Total personal                                                285,323        168,807           6     454,136

Commercial, industrial and
  international trade                                         130,994        133,560           -     264,554

Commercial real estate                                         94,706         36,052           -     130,758

Other property-related lending                                 53,832         15,627           -      69,459

Government                                                      4,283          6,727           -      11,010

Other commercial                                               43,186         38,781           -      81,967
Total corporate and commercial                                327,001        230,747           -     557,748

Non-bank financial institutions                                18,138         16,471           -      34,609

Settlement accounts                                             3,774            358           -       4,132
Total financial                                                21,912         16,829           -      38,741

Gross advances to customers                                   634,236        416,383           6   1,050,625

Impairment allowances                                          (2,838)        (4,005)          -      (6,843)

Net advances to customers                                     631,398        412,378           6   1,043,782

At 31Dec05

Residential mortgages                                         182,257        117,211           4     299,472

Hong Kong SAR Government's Home Ownership Scheme, Private
  Sector Participation Scheme and Tenants
  Purchase Scheme mortgages                                    36,291              -           -      36,291

Credit card advances                                           29,882         16,539           -      46,421

Other personal                                                 27,480         31,316           1      58,797
Total personal                                                275,910        165,066           5     440,981

Commercial, industrial and
  international trade                                         129,774        110,668           -     240,442

Commercial real estate                                         97,364         32,615           -     129,979

Other property-related lending                                 47,661         17,340           -      65,001

Government                                                      2,347          5,891           -       8,238

Other commercial                                               53,681         37,851           -      91,532
Total corporate and commercial                                330,827        204,365           -     535,192

Non-bank financial institutions                                15,246         11,987           -      27,233

Settlement accounts                                             2,173            323           -       2,496
Total financial                                                17,419         12,310           -      29,729

Gross advances to customers                                   624,156        381,741           5   1,005,902

Impairment allowances                                          (3,092)        (3,484)          -      (6,576)

Net advances to customers                                     621,064        378,257           5     999,326

Net advances to customers increased by HK$44.5 billion, or 4.4 per cent, since
the end of 2005.

Net advances in Hong Kong rose by HK$10.3 billion, or 1.7 per cent. Mortgage
lending increased by 5.1 per cent due to successful campaigns by the bank in
Hong Kong and Hang Seng Bank. This excludes the impact of the fall in lending
under the Government Home Ownership Scheme which remained suspended throughout
2006. Credit card and other personal lending rose following extensive marketing
activity. Corporate and commercial loan balances decreased, primarily due to the
repayment of advances by large corporate customers towards the year end,
although advances to smaller businesses in the property and manufacturing
sectors grew, boosted by increased demand from manufacturers with operations in
mainland China, and trade finance balances increased at Hang Seng Bank.

In the rest of Asia-Pacific, net advances increased by HK$34.1 billion, or 9.0
per cent. The broker-originated mortgage portfolio in Australia was sold in
December 2006 and part of the mortgage book in New Zealand was reclassified as
held for sale and included within 'Other assets'. Excluding these portfolios,
gross advances grew by HK$51.1 billion, or 14.0 per cent, reflecting successful
business expansion across the region. Mortgage lending increased by 12.0 per
cent, principally in Australia (non-broker business), India and Taiwan. Credit
card receivables grew by 20.9 per cent, largely in India, Australia, the
Philippines and Thailand, and the consumer finance business expanded following
its successful launch in India, Indonesia and Australia. Lending to commercial
and corporate customers rose by 12.9 per cent, notably in mainland China, India,
Mauritius and Australia, as the group focused on capturing cross-border business
and the provision of trade finance.

19. Analysis of advances to customers by geographic areas according to the
location of counterparties, after risk transfer

                                                                    Rest of   Americas/
Figures in HK$m                                    Hong Kong   Asia-Pacific      Europe   Others       Total

At 31Dec06

Gross advances to customers                          581,443        396,781      66,971    5,430   1,050,625
Overdue advances to customers                          2,320          2,668         309        4       5,301

At 31Dec05

Gross advances to customers                          570,329        354,626      73,959    6,988   1,005,902
Overdue advances to customers                          2,337          2,222         223        8       4,790





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