HSBC 2003 Annual Report Download - page 144

HSBC HOLDINGS PLC
Financial Review (continued)
142
Gross loans and advances to customers
2002
On
acquisition of
Household
Constant
currency
effect
Under-
lying
change 2003
US$m US$m US$m US$m US$m
Personal
Residential mortgages ...................................... 96,984 39,293 6,841 22,346 165,464
Hong Kong Government Home Ownership
Scheme ......................................................... 7,255 –33 (998
)
6,290
Other personal .................................................. 48,562 68,927 3,871 12,785 134,145
Total personal ................................................... 152,801 108,220 10,745 34,133 305,899
Corporate and commercial
Commercial, industrial and international trade.. 79,015 –7,907 (1,254
)
85,668
Commercial real estate ..................................... 29,267 –2,447 3,374 35,088
Other property-related ...................................... 15,347 –823 970 17,140
Government ...................................................... 8,953 –193 444 9,590
Other commercial1 ............................................ 40,674 157 3,917 (718
)
44,030
Total corporate and commercial ....................... 173,256 157 15,287 2,816 191,516
Financial
Non-bank financial institutions ......................... 27,487 –2,006 7,598 37,091
Settlement accounts .......................................... 8,385 –376 (167
)
8,594
Total financial .................................................. 35,872 –2,382 7,431 45,685
Total gross loans and advances to customers .... 361,929 108,377 28,414 44,380 543,100
1 Other commercial includes advances in respect of agriculture, transport, energy and utilities.
The commentary below is on a constant currency
basis and excludes the impact of the acquisition of
Household except where stated.
Residential mortgages increased by
US$22.3 billion, of which US$7 billion arose in
Household post-acquisition. Including Household,
mortgages comprised 31 per cent of total gross loans
to customers at 31 December 2003. Residential
mortgages in Europe increased by US$9 billion, of
which US$8 billion arose in UK Banking, reflecting
the success of a number of marketing initiatives,
including competitive pricing and First Direct’s
Offset mortgage product, as well as the continuing
high level of mortgage refinancing activity in the
market. Residential mortgage lending in Hong Kong
declined as the property market weakened and
demand fell, although there were tentative signs of
recovery towards the end of the year. The suspension
of the sale of new homes under the Hong Kong
Government Home Ownership Scheme in 2001
resulted in lower outstanding balances on these
loans.
In the rest of Asia-Pacific, residential mortgages
grew by US$4 billion, with strong growth in Korea,
Singapore, Australia and New Zealand, the latter
from the acquisition of AMP Bank’s mortgage
business.
Other personal lending increased by
US$12.8 billion, or 24 per cent, of which
US$6 billion arose in Household post-acquisition.
Including Household, other personal lending
increased to 25 per cent of total gross loans to
customers at 31 December 2003. There was strong
growth in the UK, with credit card balances
increasing by 18 per cent. European Private Banking
customers increased other personal lending by 25 per
cent taking advantage of interest rates to finance
higher returning securities. Across the rest of
Asia-Pacific loan increase was about 18 per cent. In
South America other personal lending nearly doubled
primarily due to the acquisition of Losango. In Hong
Kong, the improving economic conditions saw
growth of 5 per cent in other personal lending which
rose to US$7,420 million.
Loans and advances to the corporate and
commercial lending (excluding settlement accounts)
grew by less than 2 per cent reflecting subdued
corporate loan demand.
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
Hongkong and Shanghai Banking Corporation,
HSBC Bank plc, HSBC Bank Middle East and
HSBC Bank USA operations, by the location of the
lending branch.