HSBC 2012 Annual Report Download - page 145

143
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Impairment of loans and advances
(Unaudited)
Loan impairment charges by geographical region
0
1,500
3,000
4,500
6,000
7,500
Europe Hong Kong Rest of
Asia-Pacific
MENA North
America
Latin
America
2012 2011
US$m
Loan impairment charges by industry
0
1,000
2,000
3,000
4,000
5,000
6,000
First lien
residential
mortgages
Other
personal
lending
Corporate
commercial
Commercial
real estate
Financial
2012 2011
US$m
Loan impairment charges decreased from US$12bn
to US$8.2bn on a reported basis, a decline of 29%
compared with 2011. On a constant currency basis,
they were 27% lower.
The improvement in loan impairment charges
was most significant in RBWM in North America
due to the continued decline in the CML portfolio
that is in run-off and the sale of the Card and Retail
Services business.
This was in part reduced by higher loan
impairment charges in Latin America. In Brazil,
delinquencies in RBWM and CMB increased,
reflecting lower economic growth in 2012. In Rest
of Asia-Pacific, loan impairment charges increased
as a result of individually assessed impairments on a
single corporate exposure in Australia and a small
number of corporate exposures in other countries.
For a more detailed analysis of the impairment of loans
and advances, see page 168.
Assets held for sale
During 2012, the growth in gross loans and advances
was affected by a reclassification of certain lending
balances to ‘Assets held for sale’. Disclosures
relating to assets held for sale are provided in the
following credit risk management tables, primarily
where the disclosure is relevant to the measurement
of these financial assets:
• Maximum exposure to credit risk (page 146);
• Distribution of financial instruments by credit
quality (page 155); and
• Ageing analysis of days past due but not
impaired gross financial instruments (page 157).
Although gross loans and advances and related
impairment allowances are reclassified from ‘Loans
and advances to customers’ and ‘Loans and
advances to banks’ in the balance sheet, there is no
equivalent income statement reclassification. As a
result, charges for loan impairment losses shown in
the credit risk disclosures include loan impairment
charges relating to financial assets classified as
‘Assets held for sale’.
Loans and advances to customers and banks measured at amortised cost
(Audited)
At 31 December 2012 At 31 December 2011
Gross
loans and
advances
Impairment
allowances
on loans and
advances
Gross
loans and
advances
Impairment
allowances
on loans and
advances
US$m US$m US$m US$m
Reported in ‘Loans and advances to customers and banks’ ......... 1,166,338 16,169 1,139,052 17,636
Reported in ‘Assets held for sale’ ................................................ 7,350 718 37,273 1,614
1,173,688 16,887 1,176,325 19,250