HSBC 2007 Annual Report Download - page 224

HSBC HOLDINGS PLC
Report of the Directors: The Management of Risk (continued)
Credit risk > Cross border exposure / Credit quality
222
Two months and over contractual delinquency in mortgage services and consumer lending
(Unaudited)
Quarter ended
31
December
2007
30
September
2007
30
June
2007
31
March
2007
31
December
2006
30
September
2006
30
June
2006
31
March
2006
US$m US$m US$m US$m US$m US$m US$m US$m
Mortgage services:
– first lien .................... 3,033 2,345 1,909 1,695 1,728 1,489 1,219 1,094
– second lien1 .............. 1,038 832 660 595 570 405 263 184
Total mortgage services1 4,071 3,177 2,569 2,290 2,298 1,894 1,482 1,278
Consumer lending:
– first lien1 ................... 1,622 1,259 907 832 820 677 627 639
– second lien1 .............. 478 346 236 220 200 143 133 154
Total consumer lending . 2,100 1,605 1,143 1,052 1,020 820 760 793
%
2 %2 % 2 % 2 % 2 % 2 %2 %2
Mortgage services:
– first lien .................... 10.29 7.46 5.76 4.53 4.39 3.68 3.04 2.80
– second lien1 .............. 15.40 11.16 7.87 6.40 5.60 3.61 2.32 1.80
Total mortgage services1 11.24 8.17 6.19 4.90 4.64 3.67 2.88 2.59
Consumer lending:
– first lien1 ................... 3.74 2.92 2.15 2.03 2.08 1.85 1.78 1.88
– second lien1 .............. 6.97 5.03 3.60 3.34 3.08 2.45 2.39 2.70
Total consumer lending . 4.18 3.21 2.34 2.21 2.22 1.93 1.86 2.00
1 Consumer lending balances for the first three quarters of 2006 have been restated due to a reclassification of balances between first lien
and second lien. Mortgage services balances for the second half of 2006 and the first half of 2007 have been restated due to a
reclassification of assets between foreclosed and second lien.
2 Expressed as a percentage of loans and advances in Personal Financial Services in the US.
Country distribution of outstandings and
cross-border exposures
(Unaudited)
HSBC controls the risk associated with cross-border
lending, essentially that foreign currency will not be
made available to local residents to make payments,
through a centralised structure of internal country
limits which are determined by taking into account
relevant economic and political factors. Exposures to
individual countries and cross-border exposure in
aggregate are kept under continual review.
The following table summarises the aggregate
of in-country foreign currency and cross-border
outstandings by type of borrower to countries which
individually represent in excess of 1 per cent of
HSBC’s total assets. The classification is based on
the country of residence of the borrower but also
recognises the transfer of country risk in respect of
third party guarantees, eligible collateral held and
residence of the head office when the borrower is a
branch. In accordance with the Bank of England
Country Exposure Report (Form CE) guidelines,
outstandings comprise loans and advances
(excluding settlement accounts), amounts receivable
under finance leases, acceptances, commercial bills,
CDs and debt and equity securities (net of short
positions), and exclude accrued interest and
intra-HSBC exposures.