HSBC 2007 Annual Report Download - page 227

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balances are 90 days or more past due, except for US
motor loans which are classified as impaired when
60 days or more past due. These loans and advances
are classified as grades 6 and 7. All other
collectively assessed loans and advances, including
those which are less than 90 days past due (less than
60 days for US motor loans), are classified as not
impaired and reported within grades 1 to 5.
Collective impairment allowances are recognised in
relation to losses that are likely to have been
incurred at the balance sheet date on which they are
collectively assessed for impairment and classified
loans in grades 1 to 5, representing a small
percentage of the total loans and advances in
these grades.
Loans and advances which were past due but not
impaired
(Audited)
Examples of exposures designated past due but not
considered impaired include loans that have missed
the most recent payment date but on which there is
no evidence of impairment; loans fully secured by
cash collateral; residential mortgages in arrears more
than 90 days, but where the value of collateral is
sufficient to repay both the principal debt and all
potential interest for at least one year; and short-term
trade facilities past due more than 90 days for
technical reasons such as delays in documentation,
but where there is no concern over the
creditworthiness of the counterparty.
At 31 December 2007 At 31 December 2006
Loans and
advances to
customers1
Loans and
advances to
banks
Loans and
advances to
customers1
Loans and
advances to
banks
US$m US$m US$m US$m
Past due up to 29 days .................................................. 33,909 22 28,359 72
Past due 30–59 days ..................................................... 10,546 – 7,353 –
Past due 60–89 days ..................................................... 3,992 – 2,796 –
48,447 22 38,508 72
Past due 90–179 days ................................................... 1,767 – 1,764 –
Past due over 180 days ................................................. 363 – 159 –
50,577 22 40,431 72
1 The majority of the loans and advances to customers that are operating within revised terms following restructuring, for details of which
see ‘Renegotiated loans’ below, are excluded from this table.
This ageing analysis includes past due loans and
advances on which collective impairment allowances
have been assessed, though at their early stage of
arrears there is no identifiable impairment as such.
Impaired loans and advances
(Audited)
At 31 December
2007
US$m
2006
US$m
Total impaired loans and advances to:
– banks ........................................................................................................................................... 12 15
– customers .................................................................................................................................... 18,304 13,785
18,316 13,800
Customer loans and advances and impairment allowances by geographical region
(Audited)
The table below presents an analysis of the
impairment allowances recognised for impaired
loans and advances that are either individually
assessed or collectively assessed, and an analysis of
collective impairment allowances on loans and
advances classified as not impaired.