HSBC 2008 Annual Report Download - page 217

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Credit cards
US credit card portfolio two or more months
delinquencies rose from 5.7 per cent at 31 December
2007 to 6.6 per cent at 31 December 2008. In the
private label cards portfolio, two or more months
delinquencies rose from 3.4 per cent at 31 December
2007 to 4.3 per cent at 31 December 2008. Higher
delinquency rates in both portfolios were driven by
continued deterioration in the US economy,
significantly higher unemployment rates, portfolio
seasoning and higher levels of personal bankruptcy
filings.
Motor vehicle finance
Two months or more delinquencies in vehicle
finance rose from 3.7 per cent at 31 December 2007
to 5.0 per cent at 31 December 2008, in part due to
portfolio ageing following the decision in July 2008
to cease new originations in HSBC Finance
from the dealer and direct-to-consumer channels,
having earlier terminated a number of dealer
relationships, particularly in the Northeast of the US.
Other personal lending
Higher delinquency rates were experienced in the
HSBC Finance unsecured lending portfolio,
excluding credit cards. The increase was driven by
a deterioration in credit quality due to the weakness
in the US economy, combined with portfolio
seasoning as the lending book aged. Balances
declined due to tightened credit criteria which
resulted in lower originations. Management actions
were taken in 2007 and continued in 2008 to reduce
risk in the portfolio including the tightening of
underwriting criteria.
The following tables provide a detailed analysis
of loan delinquency in the US.
Two months and over contractual delinquency1
(Unaudited)
Quarter ended
31
December
2008
30
September
2008
30
June
2008
31
March
2008
31
December
2007
30
September
2007
30
June
2007
31
March
2007
US$m US$m US$m US$m US$m US$m US$m US$m
In Personal Financial
Services in the US
Residential mortgages ... 9,236 7,061 5,9842 5,7572 5,16724,077 3,183 2,871
Second lien mortgage
lending ....................... 1,790 1,616 1,585 1,638 1,602 1,249 945 872
Vehicle finance .............. 541 512 445 370 488 451 384 302
Credit card ..................... 2,029 1,871 1,700 1,782 1,830 1,581 1,314 1,274
Private label ................... 701 624 590 591 598 536 434 429
Personal non-credit card 2,998 2,745 2,606 2,650 2,634 2,238 2,000 1,881
Total ............................... 17,295 14,429 12,910 12,788 12,319 10,132 8,260 7,629
%
3 %3 % 3 % 3 % 3 % 3 %3 %3
Residential mortgages ... 11.42 8.23 6.652 5.962 5.232 4.04 3.10 2.70
Second lien mortgage
lending ....................... 12.26 10.59 9.83 9.76 9.10 6.86 5.07 4.44
Vehicle finance .............. 4.98 4.27 3.48 2.83 3.68 3.40 2.91 2.30
Credit card ..................... 6.64 6.07 5.57 5.81 5.68 5.09 4.32 4.43
Private label ................... 4.26 3.97 3.65 3.66 3.43 3.28 2.72 2.65
Personal non-credit card 17.70 15.31 14.00 13.71 13.16 10.88 9.69 9.33
Total ............................... 10.16 8.13 7.01 6.64 6.18 5.05 4.10 3.74