HSBC 2008 Annual Report Download - page 206

HSBC HOLDINGS PLC
Report of the Directors: Risk (continued)
Credit risk > Credit exposure > Concentration
204
9 per cent, particularly in Western Canada, as
demand remained strong for commercial loans.
In Latin America, corporate and commercial
lending rose by 20 per cent, driven by higher lending
in Brazil as a result of strong growth in the trade
loans portfolio and working capital products.
Loans and advances to the financial sector rose
by 15 per cent with strong growth in the UK and
North America, largely in collateralised lending.
Lending balance were 46 per cent higher in the UK
due to the increased use of secured funding facilities
through the London Clearing House in the form of
repos. In North America, higher lending was driven
by HSBC USA due to the reclassification from
‘Other assets’ of cash collateral held with other
institutions.
Loans and advances to banks fell by 29 per cent
to US$154 billion due to a significant decline in
placement activity in Hong Kong and Europe. This
was driven by a reduction in money market and
inter-bank placements in favour of treasury bills and
bank securities. In the UK, a higher proportion of
assets were invested in government and government-
guaranteed debt. Elsewhere, growth in Latin
America was primarily in Brazil, due to higher
reverse repo balances.
The following tables analyse loans by industry
sector and by the location of the principal operations
of the lending subsidiary or, in the case of the
operations of The Hongkong and Shanghai Banking
Corporation Limited, HSBC Bank plc, HSBC Bank
Middle East Limited and HSBC Bank USA N.A., by
the location of the lending branch.
Gross loans and advances to customers by industry sector
(Audited: 2008 to 2005; Unaudited: 2004)
2008 2007 2006 2005 2004
US$m US$m US$m US$m US$m
Personal .................................................................... 440,227 500,834 476,146 420,476 387,852
Residential mortgages1 ........................................ 243,337 269,068 265,337 238,546 227,847
Other personal ..................................................... 196,890 231,766 210,809 181,930 160,005
Corporate and commercial ...................................... 407,474 400,771 343,107 278,709 231,772
Commercial, industrial and international trade ... 209,840 202,038 162,109 130,802 101,876
Commercial real estate ........................................ 70,969 72,345 60,366 51,815 43,469
Other property-related ......................................... 30,739 33,907 27,165 22,196 20,749
Government ......................................................... 6,544 5,708 8,990 8,218 10,527
Other commercial2 ............................................... 89,382 86,773 84,477 65,678 55,151
Financial .................................................................. 101,085 99,148 62,458 52,174 66,148
Non-bank financial institutions ........................... 99,536 96,781 59,204 50,032 52,329
Settlement accounts ............................................. 1,549 2,367 3,254 2,142 13,819
Asset-backed securities reclassified ........................ 7,991 – – – –
Total gross loans and advances to customers3 ........ 956,777 1,000,753 881,711 751,359 685,772
Impaired loans4,6 ...................................................... 25,352 19,582 15,071 12,338 13,031
– as a percentage of gross loans and advances
to customers4 ................................................... 2.6% 2.0% 1.7% 1.6% 1.9%
Total impairment allowances5 ................................. 23,909 19,205 13,578 11,357 12,542
– as a percentage of total gross loans
and advances ................................................... 2.5% 1.9% 1.5% 1.5% 1.8%
1 Residential mortgages include Hong Kong Government Home Ownership Scheme loans of US$3,882 million (2007: US$3,942 million;
2006: US$4,078 million; 2005: US$4,680 million; 2004: US$5,383 million).
2 Other commercial loans and advances include advances in respect of agriculture, transport, energy and utilities.
3 Included within this total is credit card lending of US$75,266 million (2007: US$82,854 million; 2006: US$74,518 million; 2005:
US$66,020 million; 2004: US$56,222 million).
4 The figures for 2004 are net of suspended interest.
5 2004: Specific provisions on impaired loans.
6 Impaired loans for 2004-2007 have been restated as a result of the reclassification of an element of a credit card portfolio as impaired.
There has been no effect on impairment allowances.