HSBC 2012 Annual Report Download - page 114

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Geographical regions > Latin America
112
Profit/(loss) before tax by country within global businesses
Retail
Banking
and Wealth
Management
US$m
Commercial
Banking
US$m
Global
Banking
and
Markets
US$m
Global
Private
Banking
US$m
Other
US$m
Total
US$m
2012
Argentina ............................................. 209 169 174 – (46) 506
Brazil .................................................... 94 359 696 17 (43) 1,123
Mexico ................................................. 338 176 201 2 (18) 699
Panama ................................................. 29 62 48 2 – 141
Other .................................................... (62) (15) 34 (1) (41) (85)
608 751 1,153 20 (148) 2,384
2011
Argentina ............................................. 91 107 148 – (2) 344
Brazil .................................................... 241 566 515 13 (105) 1,230
Mexico ................................................. 403 129 268 4 (178) 626
Panama ................................................. 23 59 52 3 (9) 128
Other .................................................... (55) 6 66 – (30) (13)
703 867 1,049 20 (324) 2,315
2010
Argentina ............................................. 89 90 105 – – 284
Brazil .................................................... 151 382 430 6 64 1,033
Mexico ................................................. 174 24 210 4 (11) 401
Panama ................................................. 48 57 33 2 – 140
Other .................................................... (100) 1 51 (2) (13) (63)
362 554 829 10 40 1,795
impairment charges rose, primarily as a result of
increased delinquency rates in RBWM and CMB,
particularly in the Business Banking portfolio,
reflecting lower economic growth in 2012. Loan
impairment charges improved during the second half
of 2012, mainly due to lower collective portfolio
provisions in Brazil.
We made significant progress in reducing the
fragmentation in our Latin American businesses
through disposals in our non-strategic markets. In
May 2012, we announced the sale of our businesses
in Colombia, Peru, Uruguay and Paraguay, with
completion expected in 2013. We will continue to
offer full branch services to our customers during
transition. In the second half of 2012, we completed
the sale of our businesses in Costa Rica, El Salvador
and Honduras. In addition, we completed the sale of
our general insurance manufacturing business in
Argentina and announced the agreement to sell a
portfolio of general insurance assets and liabilities in
Mexico with completion expected in 2013. Under
the terms of these agreements, the purchasers will
provide general insurance products to HSBC to sell
to our retail customers in the two countries. This
long-term collaboration will broaden and strengthen
the suite of general insurance products available to
our customers. In February 2013, we announced an
agreement to sell our operations in Panama. The
transaction is subject to regulatory approvals and
other conditions and is expected to complete by the
third quarter of 2013.
In our RBWM business, we made good progress
in developing a wealth management service that
addresses our customers’ needs and we strengthened
our sales force capabilities to capture wealth creation
in the region. Wealth Management revenues
increased by over US$275m or 36%. This included
the favourable effect of the recognition of a PVIF
asset in Brazil. Excluding this gain, Wealth
Management revenues rose by 17%, mainly from
insurance and mutual funds.
In CMB, we worked closely with GB&M
to ensure our clients had access to appropriate
products. In addition, our relationships with CMB
payroll customers enabled us to increase personal
lending to their employees, who became our RBWM
customers. We were able to provide support to
companies as they grow internationally through our
Global Trade and Receivables Finance products, and
used our international expertise to capture trade and
capital flows, notably in the Brazil-China trade
corridors. We continued to strengthen our service to
international SMEs by increasing the number of
specialist International Relationship Managers in
Brazil.
In GB&M, we continued to target international
corporate customers throughout Latin America.