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Annual Financial Report - 27 of 48

3rd Apr 2013 16:43

RNS Number : 3820B

HSBC Holdings PLC

03 April 2013

Further analysis of impairment

Movement in impairment allowances by industry sector and by geographical region

(Unaudited)

	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Impairment allowances at 1 January 2012...	5,292	581	782	1,731	7,239	2,011	17,636

Amounts written off ...................................	(2,375)	(219)	(540)	(305)	(4,181)	(2,192)	(9,812)
Personal ...................................................	(828)	(128)	(347)	(126)	(3,862)	(1,614)	(6,905)
- first lien residential mortgages ............	(28)	-	(7)	(2)	(1,952)	(70)	(2,059)
- other personal1 ...................................	(800)	(128)	(340)	(124)	(1,910)	(1,544)	(4,846)

Corporate and commercial .......................	(1,428)	(91)	(193)	(154)	(234)	(577)	(2,677)
- manufacturing and international tradeand services .........................................	(661)	(91)	(164)	(137)	(59)	(498)	(1,610)
- commercial real estate and other property-related ..................................	(377)	-	(8)	(6)	(97)	(18)	(506)
- other commercial9 ..............................	(390)	-	(21)	(11)	(78)	(61)	(561)

Financial2 .................................................	(119)	-	-	(25)	(85)	(1)	(230)

Recoveries of amounts written off in previousyears ........................................................	409	31	150	75	129	352	1,146
Personal ...................................................	354	30	132	50	88	312	966
- first lien residential mortgages ............	34	4	2	5	46	49	140
- other personal1 ...................................	320	26	130	45	42	263	826

Corporate and commercial .......................	51	1	18	25	38	39	172
- manufacturing and international tradeand services .........................................	16	1	5	2	7	28	59
- commercial real estate and other property-related ..................................	9	-	11	-	19	2	41
- other commercial9 ..............................	26	-	2	23	12	9	72

Financial2 .................................................	4	-	-	-	3	1	8

Charge to income statement .......................	1,874	84	340	255	3,462	2,145	8,160
Personal ...................................................	348	96	234	57	3,228	1,399	5,362
- first lien residential mortgages ............	(56)	(11)	14	7	1,986	(30)	1,910
- other personal1 ...................................	404	107	220	50	1,242	1,429	3,452

Corporate and commercial .......................	1,547	(14)	102	169	252	746	2,802
- manufacturing and international tradeand services .........................................	670	(12)	32	80	62	625	1,457
- commercial real estate and other property-related ..................................	444	7	55	62	94	28	690
- other commercial9 ..............................	433	(9)	15	27	96	93	655

Financial2 .................................................	(21)	2	4	29	(18)	-	(4)

Exchange and other movements18 ..............	161	(4)	14	55	(1,033)	(154)	(961)

At 31 December 2012...............................	5,361	473	746	1,811	5,616	2,162	16,169

Impairment allowances against banks:
- individually assessed .............................	40	-	-	17	-	-	57
Impairment allowances against customers:
- individually assessed .............................	3,781	192	442	1,323	428	406	6,572
- collectively assessed17 ..........................	1,540	281	304	471	5,188	1,756	9,540

At 31 December 2012...............................	5,361	473	746	1,811	5,616	2,162	16,169

	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Impairment allowances at 1 January 2011.....	5,740	629	959	1,669	9,234	2,010	20,241

Amounts written off .....................................	(2,781)	(210)	(554)	(187)	(6,830)	(1,918)	(12,480)
Personal .....................................................	(1,685)	(116)	(391)	(172)	(6,591)	(1,476)	(10,431)
- first lien residential mortgages ..............	(25)	-	(6)	(2)	(2,545)	(84)	(2,662)
- other personal1 .....................................	(1,660)	(116)	(385)	(170)	(4,046)	(1,392)	(7,769)

Corporate and commercial .........................	(1,066)	(94)	(161)	(15)	(233)	(440)	(2,009)
- manufacturing and international tradeand services ...........................................	(554)	(64)	(120)	(4)	(100)	(295)	(1,137)
- commercial real estate and other property-related ....................................	(265)	(6)	(13)	(10)	(83)	(15)	(392)
- other commercial9 ................................	(247)	(24)	(28)	(1)	(50)	(130)	(480)

Financial2 ...................................................	(30)	-	(2)	-	(6)	(2)	(40)

Recoveries of amounts written off in previousyears ..........................................................	572	47	185	102	132	388	1,426
Personal .....................................................	525	31	168	53	101	297	1,175
- first lien residential mortgages ..............	21	4	3	-	39	19	86
- other personal1 .....................................	504	27	165	53	62	278	1,089

Corporate and commercial .........................	44	16	12	49	30	91	242
- manufacturing and international tradeand services ...........................................	19	16	8	2	8	82	135
- commercial real estate and other property-related ....................................	7	-	1	-	8	4	20
- other commercial9 ................................	18	-	3	47	14	5	87

Financial2 ...................................................	3	-	5	-	1	-	9

Charge to income statement .........................	1,902	117	274	292	7,050	1,870	11,505
Personal .....................................................	610	77	215	124	6,887	1,405	9,318
- first lien residential mortgages ..............	98	(10)	5	42	3,899	69	4,103
- other personal1 .....................................	512	87	210	82	2,988	1,336	5,215

Corporate and commercial .........................	1,277	37	55	146	122	477	2,114
- manufacturing and international tradeand services ...........................................	416	57	35	25	42	326	901
- commercial real estate and other property-related ....................................	498	-	9	150	48	59	764
- other commercial9 ................................	363	(20)	11	(29)	32	92	449

Financial2 ...................................................	15	3	4	22	41	(12)	73

Exchange and other movements18 ................	(141)	(2)	(82)	(145)	(2,347)	(339)	(3,056)

At 31 December 2011 ..................................	5,292	581	782	1,731	7,239	2,011	17,636

Impairment allowances against banks:
- individually assessed ...............................	50	-	-	17	58	-	125
Impairment allowances against customers:
- individually assessed ...............................	3,754	288	505	1,250	416	324	6,537
- collectively assessed17 ............................	1,488	293	277	464	6,765	1,687	10,974

At 31 December 2011 ..................................	5,292	581	782	1,731	7,239	2,011	17,636

For footnotes, see page 249.

Movement in impairment allowances by industry sector

(Unaudited)

	2012	2011	2010	2009	2008
	US$m	US$m	US$m	US$m	US$m

Impairment allowances at 1 January .................................	17,636	20,241	25,649	23,972	19,212

Amounts written off .........................................................	(9,812)	(12,480)	(19,300)	(24,840)	(17,955)
Personal ........................................................................	(6,905)	(10,431)	(16,458)	(22,703)	(16,625)
- first lien residential mortgages ................................	(2,059)	(2,662)	(4,163)	(4,704)	(2,110)
- other personal1 ......................................................	(4,846)	(7,769)	(12,295)	(17,999)	(14,515)

Corporate and commercial ............................................	(2,677)	(2,009)	(2,789)	(1,984)	(1,294)
- manufacturing and international trade and services .	(1,610)	(1,137)	(1,050)	(1,093)	(789)
- commercial real estate and other property-related .	(506)	(392)	(1,280)	(327)	(115)
- other commercial9 .................................................	(561)	(480)	(459)	(564)	(390)

Financial2 ......................................................................	(230)	(40)	(53)	(153)	(36)

Recoveries of amounts written off in previous years .........	1,146	1,426	1,020	890	834
Personal ........................................................................	966	1,175	846	712	686
- first lien residential mortgages ................................	140	86	93	61	19
- other personal1 ......................................................	826	1,089	753	651	667

Corporate and commercial ............................................	172	242	156	170	142
- manufacturing and international trade and services .	59	135	92	123	76
- commercial real estate and other property-related .	41	20	21	9	6
- other commercial9 .................................................	72	87	43	38	60

Financial2 ......................................................................	8	9	18	8	6

Charge to income statement .............................................	8,160	11,505	13,548	24,942	24,131
Personal ........................................................................	5,362	9,318	11,187	19,781	20,950
- first lien residential mortgages ................................	1,910	4,103	3,461	4,185	5,000
- other personal1 ......................................................	3,452	5,215	7,726	15,596	15,950

Corporate and commercial ............................................	2,802	2,114	2,198	4,711	2,879
- manufacturing and international trade and services .	1,457	901	909	2,392	1,573
- commercial real estate and other property-related .	690	764	660	1,492	755
- other commercial9 .................................................	655	449	629	827	551

Financial2 ......................................................................	(4)	73	163	450	302

Exchange and other movements18 ....................................	(961)	(3,056)	(676)	685	(2,250)

At 31 December ...............................................................	16,169	17,636	20,241	25,649	23,972

Impairment allowances against banks:
- individually assessed ...................................................	57	125	158	107	63
Impairment allowances against customers:
- individually assessed ...................................................	6,572	6,537	6,457	6,494	3,284
- collectively assessed ...................................................	9,540	10,974	13,626	19,048	20,625

At 31 December ...............................................................	16,169	17,636	20,241	25,649	23,972

For footnotes, see page 249.

Movement in impairment allowances on loans and advances to customers and banks

(Audited)

	Banks	Customers
	individually assessed	Individually assessed	Collectively assessed	Total
	US$m	US$m	US$m	US$m
2012
At 1 January ......................................................................	125	6,537	10,974	17,636
Amounts written off ..........................................................	(70)	(2,361)	(7,381)	(9,812)
Recoveries of loans and advances previously written off ....	-	199	947	1,146
Charge to income statement ..............................................	-	2,139	6,021	8,160
Exchange and other movements18 ......................................	2	58	(1,021)	(961)

At 31 December .................................................................	57	6,572	9,540	16,169

Impairment allowances on loans; and advances to customers ......................................................................................		6,572	9,540	16,112
- personal .....................................................................		685	7,527	8,212
- corporate and commercial ..........................................		5,407	1,939	7,346
- financial .....................................................................		480	74	554

	%	%	%	%

As a percentage of loans and advances19,20 ......................	0.05	0.67	0.98	1.48

	US$m	US$m	US$m	US$m
2011
At 1 January ......................................................................	158	6,457	13,626	20,241
Amounts written off ..........................................................	(16)	(1,633)	(10,831)	(12,480)
Recoveries of loans and advances previously written off ....	-	191	1,235	1,426
Charge to income statement ..............................................	(16)	1,931	9,590	11,505
Exchange and other movements18 ......................................	(1)	(409)	(2,646)	(3,056)

At 31 December .................................................................	125	6,537	10,974	17,636

Impairment allowances on loans and advances to customers ......................................................................................		6,537	10,974	17,511
- personal .....................................................................		694	9,066	9,760
- corporate and commercial ..........................................		5,231	1,820	7,051
- financial .....................................................................		612	88	700

	%	%	%	%

As a percentage of loans and advances19,20 ......................	0.09	0.71	1.20	1.67

For footnotes, see page 249.

Individually and collectively assessed impairment charge to the income statement by industry sector

(Unaudited)

	2012			2011
	Individually assessed US$m	Collectively assessed US$m	Total US$m	Individually assessed US$m	Collectively assessed US$m	Total US$m

Banks ..........................................................	-	-	-	(16)	-	(16)
Personal ......................................................	96	5,266	5,362	141	9,177	9,318
First lien residential mortgages .................	40	1,870	1,910	104	3,999	4,103
Other personal1 .......................................	56	3,396	3,452	37	5,178	5,215

Corporate and commercial ..........................	2,029	773	2,802	1,703	411	2,114
Manufacturing and international tradeand services .........................................	910	547	1,457	572	329	901
Commercial real estate and otherproperty-related ..................................	604	86	690	768	(4)	764
Other commercial9 ..................................	515	140	655	363	86	449

Financial .....................................................	14	(18)	(4)	87	2	89

Total charge to income statement ...............	2,139	6,021	8,160	1,915	9,590	11,505

For footnotes, see page 249.

Net loan impairment charge to the income statement

(Unaudited)

	2012	2011	2010	2009	2008
	US$m	US$m	US$m	US$m	US$m

Individually assessed impairment allowances .....................	2,139	1,915	2,625	4,458	2,064
New allowances .............................................................	3,272	2,904	3,617	5,173	2,742
Release of allowances no longer required .......................	(934)	(798)	(847)	(581)	(565)
Recoveries of amounts previously written off ...............	(199)	(191)	(145)	(134)	(113)

Collectively assessed impairment allowances .....................	6,021	9,590	10,923	20,484	22,067
New allowances net of allowance releases ......................	6,968	10,825	11,798	21,240	22,788
Recoveries of amounts previously written off ...............	(947)	(1,235)	(875)	(756)	(721)


Total charge for impairment losses ...................................	8,160	11,505	13,548	24,942	24,131
Banks ...........................................................................	-	(16)	12	70	54
Customers ....................................................................	8,160	11,521	13,536	24,872	24,077


At 31 December
Impaired loans ..................................................................	38,776	41,739	47,064	30,845	25,422
Impairment allowances .....................................................	16,169	17,636	20,241	25,649	23,972

Charge for impairment losses as a percentage of average gross loans and advances to customers by geographical region

(Unaudited)

	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Total
	%	%	%	%	%	%	%
2012
New allowances net of allowance releases ...	0.58	0.07	0.37	1.16	2.31	4.36	1.00
Recoveries .................................................	(0.10)	(0.02)	(0.11)	(0.26)	(0.08)	(0.62)	(0.12)

Total charge for impairment losses ............	0.48	0.05	0.26	0.90	2.23	3.74	0.88

Amount written off net of recoveries ........	0.50	0.11	0.30	0.81	2.57	3.21	0.93

2011
New allowances net of allowance releases ...	0.59	0.11	0.38	1.46	4.01	3.54	1.34
Recoveries .................................................	(0.14)	(0.03)	(0.15)	(0.38)	(0.07)	(0.61)	(0.15)

Total charge for impairment losses ............	0.45	0.08	0.23	1.08	3.94	2.93	1.19

Amount written off net of recoveries ........	0.52	0.11	0.31	0.32	3.74	2.39	1.14

Charge for impairment losses as a percentage of average gross loans and advances to customers

(Unaudited)

	2012	2011	2010	2009	2008
	%	%	%	%	%

New allowances net of allowance releases ..........................	1.00	1.34	1.65	2.92	2.54
Recoveries ........................................................................	(0.12)	(0.15)	(0.12)	(0.10)	(0.09)

Total charge for impairment losses ...................................	0.88	1.19	1.53	2.82	2.45

Amount written off net of recoveries ...............................	0.93	1.14	2.08	2.71	1.75

Loans and advances to customers are excluded from average balances when reclassified to 'Assets held for sale'. Including these loans and advances to customers, the total new allowances net of allowance releases would be 1.00%, recoveries 0.12%, and amounts written off net of recoveries 0.93%.

Reconciliation of reported and constant currency changes by geographical region

(Unaudited)

	31 Dec 11 as reported	Currency translation adjustment21	31 Dec 11 at 31 Dec 12 exchange rates	Movement on a constant currency basis	31 Dec 12 as reported	Reported change22	Constant currency change22
	US$m	US$m	US$m	US$m	US$m	%	%
Impaired loans
Europe .......................	11,819	451	12,270	(1,125)	11,145	(6)	(9)
Hong Kong ................	608	1	609	(132)	477	(22)	(22)
Rest of Asia-Pacific ...	1,070	27	1,097	50	1,147	7	5
Middle East and North Africa ....................	2,445	(6)	2,439	35	2,474	1	1
North America ..........	22,758	17	22,775	(2,430)	20,345	(11)	(11)
Latin America ...........	3,039	(108)	2,931	257	3,188	5	9

	41,739	382	42,121	(3,345)	38,776	(7)	(8)

Impairment allowances
Europe .......................	5,292	203	5,495	(134)	5,361	1	(2)
Hong Kong ................	581	2	583	(110)	473	(19)	(19)
Rest of Asia-Pacific ...	782	17	799	(53)	746	(5)	(7)
Middle East and North Africa ........................	1,731	(5)	1,726	85	1,811	5	5
North America ..........	7,239	14	7,253	(1,637)	5,616	(22)	(23)
Latin America ...........	2,011	(114)	1,897	265	2,162	8	13

	17,636	117	17,753	(1,584)	16,169	(8)	(9)

For footnotes, see page 249.

Reconciliation of reported and constant currency impairment charge to the income statement

(Unaudited)

	31 Dec 11 as reported	Currency translation adjustment21	31 Dec 11 at 31 Dec 12 exchange rates	Movement on a constant currency basis	31 Dec 12 as reported	Reported change22	Constant currency change22
	US$m	US$m	US$m	US$m	US$m	%	%
Europe
Charge for impairment losses ........................	1,902	(47)	1,855	19	1,874	(1)	1
New allowances ........	3,033	(82)	2,951	92	3,043	0	3
Releases ...................	(560)	29	(531)	(229)	(760)	36	43
Recoveries ...............	(571)	6	(565)	156	(409)	(28)	(28)

Hong Kong
Charge for impairment losses ........................	117	-	117	(33)	84	(28)	(28)
New allowances ........	268	-	268	(44)	224	(16)	(16)
Releases ...................	(104)	-	(104)	(5)	(109)	5	5
Recoveries ...............	(47)	-	(47)	16	(31)	(34)	(34)

Rest of Asia-Pacific
Charge for impairment losses ........................	274	(1)	273	67	340	24	25
New allowances ........	681	(17)	664	13	677	(1)	2
Releases ...................	(222)	10	(212)	25	(187)	(16)	(12)
Recoveries ...............	(185)	6	(179)	29	(150)	(19)	(16)

MENA
Charge for impairment losses ........................	292	-	292	(37)	255	(13)	(13)
New allowances ........	630	-	630	(50)	580	(8)	(8)
Releases ...................	(235)	-	(235)	(15)	(250)	6	6
Recoveries ...............	(103)	-	(103)	28	(75)	(27)	(27)

North America
Charge for impairment losses ........................	7,050	-	7,050	(3,588)	3,462	(51)	(51)
New allowances ........	7,566	-	7,566	(3,677)	3,889	(49)	(49)
Releases ...................	(385)	-	(385)	87	(298)	(23)	(23)
Recoveries ...............	(131)	-	(131)	2	(129)	(2)	(2)

Latin America
Charge for impairment losses ........................	1,870	(217)	1,653	492	2,145	15	30
New allowances ........	2,421	(239)	2,182	399	2,581	7	18
Releases ...................	(162)	(24)	(186)	102	(84)	(48)	(55)
Recoveries ...............	(389)	46	(343)	(9)	(352)	(10)	3

Total
Charge for impairment losses ........................	11,505	(265)	11,240	(3,080)	8,160	(29)	(27)
New allowances ........	14,599	(338)	14,261	(3,267)	10,994	(25)	(23)
Releases ...................	(1,668)	15	(1,653)	(35)	(1,688)	1	2
Recoveries ...............	(1,426)	58	(1,368)	222	(1,146)	(20)	(16)

Concentration of exposure

(Unaudited)

Concentrations of credit risk are described in the Appendix to Risk on page 259. An analysis of credit quality is provided on page 154.

The diversification of our lending portfolio across the regions, together with our broad range of global businesses and products, ensured that we were not overly dependent on a few countries or markets to generate income and growth in 2012. Our geographical diversification also supported our strategies for growth in faster-growing markets and those with international connectivity.

Trading assets

(Unaudited)

	2012	2011
	US$bn	US$bn

Trading securities23 ....................	213	186
Loans and advances to banks .....	78	76
Loans and advances to customers ..................................................	118	69

	409	331

For footnote, see page 249.

The largest concentration of securities held-for-trading within trading assets was in government and government agency debt securities. We had significant exposures to US Treasury and government agency securities (US$28bn) and UK (US$12bn) and Hong Kong (US$6bn) government securities. For an analysis of securities held for trading, see Note 14 on the Financial Statements.

Financial investments

Our holdings of available-for-sale government and government agency debt securities, corporate debt securities, ABSs and other securities were spread across a wide range of issuers and geographical regions, with 14% invested in securities issued by banks and other financial institutions. We also hold assets backing insurance and investment contracts. For an analysis of financial investments, see Note 20 on the Financial Statements.

Derivatives

Derivative assets were US$357bn at 31 December 2012 (2011: US$346bn), of which the largest

concentrations were interest rate and, to a lesser extent, foreign exchange derivatives. Our exposure to derivatives increased, mainly due to a rise in the fair value of interest rate contracts following the downward movements in yield curves in major currencies, largely in Europe. However, this was partly offset by a rise in netting from an increase in trading through clearing houses coupled with the rise in fair values. For an analysis of derivatives, see Note 19 on the Financial Statements.

Loans and advances

Gross loans and advances to customers (excluding the financial sector) of US$932bn increased by US$61bn or 7% at 31 December 2012 compared with 2011, or 5% on a constant currency basis.

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, HSBC Bank, HSBC Bank Middle East and HSBC Bank USA, by the location of the lending branch.

Gross loans and advances by industry sector

(Unaudited)

	2012	Currency effect	Move- ment	2011	2010	2009	2008
	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Personal .........................................	415,093	7,741	13,727	393,625	425,320	434,206	440,227
First lien residential mortgages24 .	301,862	6,776	16,123	278,963	268,681	260,669	243,337
Other personal1 ...........................	113,231	965	(2,396)	114,662	156,639	173,537	196,890

Corporate and commercial ..............	513,493	8,376	32,301	472,816	445,512	383,090	407,474
Manufacturing .............................	112,149	1,392	14,703	96,054	91,121	80,487	81,103
International trade and services ...	169,389	2,727	13,953	152,709	146,573	115,641	128,737
Commercial real estate ................	76,760	1,544	1,275	73,941	71,880	69,389	70,969
Other property-related ................	40,532	406	587	39,539	34,838	30,520	30,739
Government ................................	10,785	184	(478)	11,079	8,594	6,689	6,544
Other commercial9 ......................	103,878	2,123	2,261	99,494	92,506	80,364	89,382

Financial .........................................	81,258	1,963	(6,924)	86,219	101,725	96,650	101,085
Non-bank financial institutions ...	79,817	1,966	(7,424)	85,275	100,163	95,237	99,536
Settlement accounts ....................	1,441	(3)	500	944	1,562	1,413	1,549

Asset-backed securities reclassified ..	3,891	208	(1,597)	5,280	5,892	7,827	7,991

Total gross loans and advances to customers ....................................	1,013,735	18,288	37,507	957,940	978,449	921,773	956,777

Gross loans and advances to banks ..	152,603	1,439	(29,948)	181,112	208,429	179,888	153,829

Total gross loans and advances (A) .	1,166,338	19,727	7,559	1,139,052	1,186,878	1,101,661	1,110,606

Impaired loans and advances ...........	38,671	379	(3,292)	41,584	46,871	30,606	25,352
- as a percentage of A ................	3.3%			4.3%	4.8%	3.3%	2.6%

Impairment allowances on loans andadvances .....................................	16,112	114	(1,513)	17,511	20,083	25,542	23,909
- as a percentage of A ................	1.4%			1.8%	2.1%	2.8%	2.5%

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.

Gross loans and advances to customers by industry sector and by geographical region

(Audited)

	Gross loans and advances to customers
	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Total	As a % of total gross
	US$m	US$m	US$m	US$m	US$m	US$m	US$m		loans
At 31 December 2012
Personal .............................	186,274	70,341	49,305	6,232	84,354	18,587	415,093		41.0
First lien residential mortgages24 ................	135,172	52,296	36,906	2,144	70,133	5,211	301,862		29.8
Other personal1 ..............	51,102	18,045	12,399	4,088	14,221	13,376	113,231		11.2

Corporate and commercial .	223,061	99,199	85,305	22,452	47,886	35,590	513,493		50.6
Manufacturing ................	56,690	10,354	19,213	3,373	9,731	12,788	112,149		11.1
International trade and services ......................	70,954	33,832	32,317	9,115	13,419	9,752	169,389		16.6
Commercial real estate ...	33,279	23,384	9,286	865	6,572	3,374	76,760		7.6
Other property-related ...	7,402	16,399	6,641	2,103	7,607	380	40,532		4.0
Government ...................	2,393	2,838	1,136	1,662	774	1,982	10,785		1.1
Other commercial9 .........	52,343	12,392	16,712	5,334	9,783	7,314	103,878		10.2

Financial ............................	55,732	4,546	4,255	1,196	13,935	1,594	81,258		8.0
Non-bank financial institutions .................	55,262	4,070	3,843	1,194	13,935	1,513	79,817		7.9
Settlement accounts .......	470	476	412	2	-	81	1,441		0.1

Asset-backed securities reclassified ......................	3,694	-	-	-	197	-	3,891		0.4

Total gross loans and advances to customers (A) .......................................	468,761	174,086	138,865	29,880	146,372	55,771	1,013,735		100.0

Percentage of A by geographicalregion .............................	46.3%	17.2%	13.7%	2.9%	14.4%	5.5%	100.0%

Impaired loans ...................	11,080	477	1,147	2,448	20,331	3,188	38,671
- as a percentage of A ...	2.4%	0.3%	0.8%	8.2%	13.9%	5.7%	3.8%

Total impairment allowances ......................	5,321	473	746	1,794	5,616	2,162	16,112
- as a percentage of A ...	1.1%	0.3%	0.5%	6.0%	3.8%	3.9%	1.6%

At 31 December 2011
Personal .............................	166,147	63,181	43,580	5,269	95,336	20,112	393,625		41.1
First lien residential mortgages24 ................	119,902	46,817	32,136	1,837	73,278	4,993	278,963		29.1
Other personal1 ..............	46,245	16,364	11,444	3,432	22,058	15,119	114,662		12.0

Corporate and commercial .	204,984	91,592	77,887	21,152	41,271	35,930	472,816		49.3
Manufacturing ................	45,632	9,004	16,909	3,517	7,888	13,104	96,054		10.0
International trade and services ......................	64,604	29,066	29,605	8,664	10,710	10,060	152,709		15.9
Commercial real estate ...	32,099	20,828	9,537	1,002	7,069	3,406	73,941		7.7
Other property-related ...	7,595	17,367	6,396	1,770	5,729	682	39,539		4.1
Government ...................	3,143	2,918	962	1,563	656	1,837	11,079		1.2
Other commercial9 .........	51,911	12,409	14,478	4,636	9,219	6,841	99,494		10.4

Financial ............................	63,671	3,473	3,183	1,168	12,817	1,907	86,219		9.0
Non-bank financial institutions .................	63,313	3,192	2,937	1,162	12,817	1,854	85,275		8.9
Settlement accounts .......	358	281	246	6	-	53	944		0.1

Asset-backed securities reclassified ......................	4,776	-	-	-	504	-	5,280		0.6

Total gross loans and advances to customers (B) .......................................	439,578	158,246	124,650	27,589	149,928	57,949	957,940		100.0

Percentage of B by geographicalregion .............................	45.9%	16.5%	13.0%	2.9%	15.7%	6.0%	100.0%

Impaired loans ...................	11,751	604	1,069	2,425	22,696	3,039	41,584
- as a percentage of B ...	2.7%	0.4%	0.9%	8.8%	15.1%	5.2%	4.3%

Total impairment allowances ......................	5,242	581	782	1,714	7,181	2,011	17,511
- as a percentage of B ...	1.2%	0.4%	0.6%	6.2%	4.8%	3.5%	1.8%

For footnotes, see page 249.

Loans and advances to banks by geographical region

(Unaudited)

	Europe	Hong Kong	Rest of Asia- Pacific	MENA	North America	Latin America	Loans and advances to banks	Impair- ment allowances25
	US$m	US$m	US$m	US$m	US$m	US$m	US$m		US$m

At 31 December 2012 ..................	45,320	23,500	44,592	9,198	13,465	16,528	152,603		(57)
At 31 December 2011 ..................	54,406	35,159	47,309	8,571	14,831	20,836	181,112		(125)
At 31 December 2010 ..................	78,239	33,585	40,437	9,335	19,479	27,354	208,429		(158)
At 31 December 2009 ......................	65,614	36,197	35,648	8,435	15,386	18,608	179,888		(107)
At 31 December 2008 ......................	62,012	29,646	28,665	7,476	11,458	14,572	153,829		(63)

For footnote, see page 249.

Gross loans and advances to customers by country

(Unaudited)

	First lien residential mortgages US$m	Other personal US$m	Property- related US$m	Commercial,international trade and other US$m	Total US$m
At 31 December 2012
Europe ....................................................	135,172	51,102	40,681	241,806	468,761
UK ..........................................................	127,024	23,446	30,342	179,799	360,611
France .....................................................	2,643	10,960	8,465	42,891	64,959
Germany ..................................................	9	284	126	5,212	5,631
Malta .......................................................	1,821	563	454	1,631	4,469
Switzerland ..............................................	298	9,403	66	191	9,958
Turkey ....................................................	1,062	4,084	317	3,356	8,819
Other .......................................................	2,315	2,362	911	8,726	14,314

Hong Kong ............................................	52,296	18,045	39,783	63,962	174,086

Rest of Asia-Pacific ..............................	36,906	12,399	15,927	73,633	138,865
Australia ..................................................	10,037	1,490	2,311	7,208	21,046
India ........................................................	1,000	394	521	5,389	7,304
Indonesia .................................................	83	508	95	5,349	6,035
Mainland China .......................................	3,539	302	5,078	19,083	28,002
Malaysia ..................................................	5,025	2,175	1,813	5,880	14,893
Singapore .................................................	10,123	4,812	3,938	9,854	28,727
Taiwan ....................................................	3,323	597	120	5,180	9,220
Vietnam ...................................................	50	252	60	1,710	2,072
Other .......................................................	3,726	1,869	1,991	13,980	21,566

Middle East and North Africa(excluding Saudi Arabia) .......................	2,144	4,088	2,968	20,680	29,880
Egypt ......................................................	2	479	124	2,600	3,205
Qatar .......................................................	11	385	484	1,082	1,962
UAE ........................................................	1,743	1,822	1,533	12,264	17,362
Other .......................................................	388	1,402	827	4,734	7,351

North America ......................................	70,133	14,221	14,179	47,839	146,372
US ...........................................................	49,417	7,382	9,449	29,315	95,563
Canada .....................................................	19,040	6,444	4,136	17,369	46,989
Bermuda ..................................................	1,676	395	594	1,155	3,820

Latin America .......................................	5,211	13,376	3,754	33,430	55,771
Argentina ................................................	28	1,532	85	2,465	4,110
Brazil .......................................................	1,745	8,042	1,287	18,022	29,096
Mexico ....................................................	1,989	2,756	1,280	9,447	15,472
Panama ...................................................	1,402	1,023	1,049	2,405	5,879
Other .......................................................	47	23	53	1,091	1,214


	301,862	113,231	117,292	481,350	1,013,735

	First lien residential mortgages US$m	Other personal US$m	Property- related US$m	Commercial, internationaltrade and other US$m	Total US$m
At 31 December 2011
Europe .....................................................	119,902	46,245	39,694	233,737	439,578
UK ..........................................................	111,224	22,218	29,191	160,236	322,869
France .....................................................	3,353	9,305	8,160	49,572	70,390
Germany ..................................................	10	343	112	4,518	4,983
Malta .......................................................	1,708	567	520	1,591	4,386
Switzerland ..............................................	1,803	10,684	156	1,918	14,561
Turkey ....................................................	767	2,797	255	3,652	7,471
Other .......................................................	1,037	331	1,300	12,250	14,918

Hong Kong ..............................................	46,817	16,364	38,195	56,870	158,246

Rest of Asia-Pacific .................................	32,136	11,444	15,933	65,137	124,650
Australia ..................................................	9,251	1,327	2,357	6,073	19,008
India ........................................................	830	461	809	3,914	6,014
Indonesia .................................................	81	463	97	4,577	5,218
Mainland China .......................................	2,769	317	5,078	15,665	23,829
Malaysia ..................................................	4,329	2,166	1,351	5,898	13,744
Singapore .................................................	7,919	4,108	3,690	9,433	25,150
Taiwan ....................................................	3,062	550	139	4,555	8,306
Vietnam ...................................................	42	184	42	1,397	1,665
Other .......................................................	3,853	1,868	2,370	13,625	21,716

Middle East and North Africa(excluding Saudi Arabia) .......................	1,837	3,432	2,772	19,548	27,589
Egypt ......................................................	2	441	100	2,775	3,318
Qatar .......................................................	9	445	354	1,098	1,906
UAE ........................................................	1,520	1,882	1,464	12,070	16,936
Other .......................................................	306	664	854	3,605	5,429

North America ........................................	73,278	22,058	12,798	41,794	149,928
US ...........................................................	52,484	14,087	7,850	27,307	101,728
Canada .....................................................	19,045	7,518	4,391	13,600	44,554
Bermuda ..................................................	1,749	453	557	887	3,646

Latin America .........................................	4,993	15,119	4,088	33,749	57,949
Argentina ................................................	32	1,379	114	2,331	3,856
Brazil .......................................................	1,657	9,802	1,660	18,638	31,757
Mexico ....................................................	1,847	2,261	1,284	8,210	13,602
Panama ...................................................	1,240	1,014	923	2,537	5,714
Other .......................................................	217	663	107	2,033	3,020


	278,963	114,662	113,480	450,835	957,940

This information is provided by RNS

The company news service from the London Stock Exchange

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