HSBC 2012 Annual Report Download - page 182

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Risk > Credit risk > Concentration of exposure
180
Gross loans and advances by industry sector (continued)
Year ended 31 December
2012
Currency
effect
Move-
ment
2011 2010 2009 2008
US$m US$m US$m US$m US$m US$m US$m
Charge for impairment losses ............... 8,160 1,558 (4,903) 11,505 13,548 24,942 24,131
New allowances net of allowance
releases ......................................... 9,306 1,500 (5,125) 12,931 14,568 25,832 24,965
Recoveries ........................................ (1,146) 58 222 (1,426) (1,020) (890) (834)
For footnotes, see page 249.
The following commentary is on a constant
currency basis (see page 179):
Personal lending was 41% of gross lending to
customers at 31 December 2012. Personal lending
balances of US$415bn were 3% higher than at
31 December 2011 for reasons explained under
‘Personal lending’ (see page 24). First lien
residential mortgage lending continued to represent
the Group’s largest concentration in a single
exposure type, the most significant balances being
in the UK (42%), Hong Kong (17%) and the
US (16%).
Corporate and commercial lending was 51%
of gross lending to customers at 31 December
2012, representing our largest lending category.
International trade and services was the biggest
portion of the corporate and commercial lending
category, which increased by 9% compared with
31 December 2011, mainly in Hong Kong and Rest
of Asia-Pacific as we focused on corporate and
commercial customers that trade internationally as
well as in the UK, despite muted demand for credit.
The most significant concentrations of international
trade and services lending were in the UK, Hong
Kong and Rest of Asia-Pacific. Our concentration
in respect of the manufacturing sector increased,
mainly driven by higher lending balances in Europe,
due to growth in the UK of overdraft balances and
corresponding customer accounts which did not meet
netting criteria under accounting rules.
Commercial real estate lending represented 8%
of total gross lending to customers. Lending
increased marginally, as the demand for funds
in property investment and development remained
strong in Hong Kong. The main concentrations of
commercial real estate lending were in the UK and
Hong Kong.
Lending to non-bank financial institutions
was US$81bn, a decrease of 8% compared with
31 December 2011 due to a decline in reverse repo
balances, mainly in Europe. Our exposure was
spread across a range of institutions, with the most
significant concentration in the UK, France and
the US.
Loans and advances to banks were widely
distributed across many countries and decreased by
16% in 2012 as reverse repo balances declined,
reflecting redeployment of liquidity to central banks,
mainly in Europe.
The tables that follow provide information
on loans and advances by geographical region and
by country. The commentary on these loans and
advances can be found in the ‘Personal lending’ and
‘Wholesale lending’ sections on pages 147 to 152.