HSBC Holdings PLC · LSE:HSBA
HSBC — H1 2009 Earnings Presentation
74 slides from HSBC's earnings presentation, Aug 3, 2009
Slide 1: HSBC Holdings plc Interim Results 2009
HSBC Holdings plc Interim Results 2009 Presentation to Investors and Analysts
Slide 2: Forward-looking statements
Forward-looking statements This presentation and subsequent discussion may contain certain forward- looking statements with respect to the financial condition, results of operations and business of the Group. These forward-looking statements represent the Group’s expectations or beliefs concerning f
Slide 3: Financial results
Financial results First half, 2009 Reported, ex movements Reported1 in FV on own debt2 Profit before tax US$5.0bn, down 51% US$7.5bn, down 21% Attributable profit US$3.3bn, down 57% US$5.6bn, down 22% Earnings per share US$0.21, down 63% Return on total shareholders’ equity 6.4% compared to 12.1% 10
Slide 4: Consistently delivering results in difficult markets
Consistently delivering results in difficult markets Business performance broadly maintained and strengthened position in faster- growing markets Capital strength boosted Strong liability-led balance sheet Costs down Record profit before tax in Global Banking and Markets 4
Slide 5: Financial performance in first half 2009
Financial performance in first half 2009
Slide 6: Financial overview
Financial overview Summary of reported results % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges, 38,651 36,461 37,198 -4 +2 ex movements in FV on own debt Loan impairment charges and other credit risk (10,058) (14,879) (13,931) +39 -6 provisions Net opera
Slide 7: Financial overview: significant factors
Financial overview Significant factors US$bn 1H08 2H08 1H09 Goodwill impairment (North America PFS) (0.5) (10.0) – Movements in FV on own debt 0.8 5.7 (2.5) Global Banking and Markets trading write-downs (3.9) (1.5) (0.8) Debt securities impairments (0.1) (0.7) (0.6) Equity investment impairments (0
Slide 8: Financial overview: underlying growth 1H09 vs 1H08
Financial overview Underlying growth, 1H09 vs 1H08 US$m 1H081 1H092 % change Net operating income before loan impairment charges 33,559 36,918 +10 Loan impairment charges and other credit risk provisions (9,460) (13,931) +47 Net operating income 24,099 22,987 -5 Total operating expenses (ex goodwill
Slide 9: Financial overview: underlying growth 1H09 vs 2H08
Financial overview Underlying growth, 1H09 vs 2H08 US$m 2H081 1H092 % change Net operating income before loan impairment charges 31,648 36,918 +17 Loan impairment charges and other credit risk provisions (14,359) (13,931) -3 Net operating income 17,289 22,987 +33 Total operating expenses (ex goodwil
Slide 10: Capitalisation and capital ratios
Capitalisation and capital ratios Generating capital post dividends Movement in Tier 1 capital, 1H09, US$bn Tier 1 ratio (%) Rights Profit2 Dividends Other issue1 net of scrip 4.7 1.1 117.4 18.2 95.3 10.1% (1.9) 1.3% 8.3% 1.3% 31 Dec 08 30 Jun 09 Risk-weighted assets, US$bn 8.8% 7.0% 1,148 1,159 31
Slide 11: Funding and liquidity
Funding and liquidity Advances-to-deposits ratio 79.5% US$bn 31 Dec 20081 30 Jun 2009 % change Customer loans -6% and advances 419 216 307 41 983 401 199 287 38 925 Customer 461 248 343 121 1,173 482 240 331 110 1,163 accounts -1% Personal Financial Services Commercial Banking Global Banking and Mar
Slide 12: Managing balance sheet risk: Personal Financial Services credit quality
Managing balance sheet risk Credit quality, Personal Financial Services: credit charges stable against 2H08 Customer loans and Loan impairment charges as % of average advances1 advances at 1H09, US$bn Europe 144 1.28 1.40 1.50 9.53 9.31 6.68 North 160 America Group Hong Kong 43 0.17 0.48 0.59 5.43 5
Slide 13: Managing balance sheet risk: Commercial Banking credit quality
Managing balance sheet risk Credit quality, Commercial Banking: credit charges in line with 2H08 in US$ Customer loans and Loan impairment charges as % of average advances1 advances at 1H09, US$bn 1.14 1.41 Europe 90 0.53 1.55 1.60 North 0.81 33 America Group 1.92 0.99 Hong Kong 27 0.20 1.42 1.53 1.
Slide 14: Global Banking and Markets, balance sheet risk
Global Banking and Markets, balance sheet risk Lower write-downs but higher loan provisions; no change to stress test guidance on AFS ABS portfolio Write-downs, US$bn AFS ABS – impairment, US$m 3.9 539 1.5 224 0.8 55 1H08 2H08 1H09 1H08 2H08 1H09 Loan impairment charges and other credit risk provisi
Slide 15: Business performance in first half 2009
Business performance in first half 2009
Slide 16: Managing the business through the downturn and positioning for the upturn
Managing the business through the downturn and positioning for the upturn Significant positive jaws Growth from diversified revenue streams Record performance in Global Banking and Markets; Commercial Banking resilient Restructuring of HSBC Finance on track 16
Slide 17: Significant positive jaws
Significant positive jaws US$bn Revenue Operating expenses +10% -3% 50.0 +17% 40.0 2 36.9 33.6 1 -5% 1 31.6 30.0 20.0 17.2 3 17.6 3 16.7 10.0 0.0 1H08 2H08 1H09 1H08 2H08 1H09 Notes: (1) Restated for constant currency, acquisitions and disposals and excludes movements in FV on own debt (2) Excludes
Slide 18: Growth from diversified revenue streams: by geography
Growth from diversified revenue streams Net operating income before loan impairment charges by geography1 1H08 US$33.6bn 2H08 US$31.6bn 1H09 US$36.9bn 12.9 10.8 10.8 9.1 9.5 8.5 5.1 5.1 4.7 4.0 4.3 4.3 4.3 4.0 4.5 1.3 1.4 1.4 (1.0) (1.5) (1.4) Hong Kong RoAP Middle East Latin America Europe North Am
Slide 19: Growth from diversified revenue streams: by customer group
Growth from diversified revenue streams Net operating income before loan impairment charges by customer group1 1H08 US$33.6bn 2H08 US$31.6bn 1H09 US$36.9bn 20.2 17.9 17.9 12.2 6.5 6.3 6.6 6.1 5.6 1.8 1.7 1.6 (0.2) (1.2) (0.9) Personal Financial Services Commercial Banking Global Banking and Markets
Slide 20: Record performance in Global Banking and Markets
Record performance in Global Banking and Markets Success in emerging markets-led, financing focussed strategy generating sustainable growth Record performance from strengthened Balanced between faster-growing emerging market position markets and developed markets Profit before tax, US$bn Profit befo
Slide 21: Balanced revenues in Global Banking and Markets
Balanced revenues in Global Banking and Markets1, US$m Global Markets Global Banking (3,124) Credit (2,378) Financing and 1,371 1,066 equity capital 2,201 1,303 markets 1,609 Rates 730 1,964 Foreign 1,546 2,296 exchange Payments 839 1,797 and cash 826 746 management 535 Equities (810) 315 Securities
Slide 22: Balanced revenues in Global Banking and Markets
Balanced revenues in Global Banking and Markets1, US$m Balance Sheet Management Global Asset Management 4,000 3,350 1,000 3,000 669 1,988 2,000 1,630 500 414 265 1,000 0 0 1H08 2H08 1H09 1H08 2H08 1H09 Principal Investments Other 500 1,000 833 167 0 (38) 500 (500) 233 146 (582) (1,000) 0 1H08 2H08 1
Slide 23: Commercial Banking resilient
Commercial Banking resilient Loan impairment charges and other credit Profit before tax, US$bn risk provisions, US$bn 5.0 1.8 4.6 4.5 1.6 1.6 1.5 4.0 1.4 3.5 51% 1.2 50% 3.0 58% 2.6 1.0 2.4 2.5 0.8 2.0 41% 43% 0.6 0.6 1.5 49% 0.4 50% 1.0 77% 42% 59% 57% 0.5 0.2 23% 0.0 0.0 1H08 2H08 1H09 1H08 2H08 1
Slide 24: Commercial Banking: Customer expansion in faster-growing emerging markets
Commercial Banking: Customer expansion in faster-growing emerging markets % in faster-growing emerging Customer numbers, 000’s markets1 3,500 +1% +6% 3,137 2,904 2,946 3,000 1H08 48% 2,500 2,000 1,500 2H08 50% 1,000 500 1H09 53% 0 1H08 2H08 1H09 Note: (1) Excludes US, Canada, Japan, Australia, New Z
Slide 25: Personal Financial Services: Profitable outside North America
Personal Financial Services: Profitable outside North America Profit / (loss) before tax1, US$bn Loan impairment charges and other credit risk provisions, US$bn 6.0 10.0 9.2 4.4 9.0 4.0 7.8 8.0 7.0 1.9 7.0 2.0 1.6 6.0 0.0 5.0 4.0 (2.0) (1.5) 2.9 3.0 2.4 2.6 (2.8) 2.0 (4.0) 1.0 (5.1) (6.0) 0.0 1H08 2
Slide 26: Restructuring of HSBC Finance Corporation on track
Restructuring of HSBC Finance Corporation on track Run-off portfolio: down 9% from December 2008 Customer loans1, US$bn Customer loans1, US$bn Run-off portfolio Core portfolio 30 Jun 07 41.5 12.7 48.8 18.6 121.6 30 Jun 07 29.3 17.4 46.7 31 Dec 07 36.2 12.9 50.2 18.3 117.6 31 Dec 07 31.0 18.7 49.7 30
Slide 27: Managing risk at HSBC Finance Corporation
Managing risk at HSBC Finance Corporation Consecutive quarters down in loan impairment charges 2+ Delinquency1, 2 Loan impairment charges3 US$bn US$bn 20 15% 5 4.6 4.6 20% 16.5 16.6 16.3 4.2 3.9 4 15 13.8 12.0% 12.4% 3.4 3.4 15% 3.3 3.2 11.9 12.3 12.4 11.2% 10% 3 9.8 9.2% 12.3% 10 10.9% 10.8% 11.0%
Slide 28: Private Banking performance remained robust
Private Banking performance remained robust Profit before tax, US$m 1,000 822 800 625 632 600 400 200 0 1H08 2H08 1H09 28
Slide 29: Strengthening position of Bancassurance in faster-growing emerging markets
Strengthening position of Bancassurance in faster-growing emerging markets Profit before tax, 1H09 PBT by region, US$bn 0.6 0.3 Insurance contributed US$1.2bn, an underlying decline of 17% and 0.0 representing 16% of Group profit1 Asia Europe Latin America North America 1H08 2H08 1H09 PBT2 by produc
Slide 30: Benchmarks
Benchmarks Target range 1H09 Return on total 15 – 19% 6.4% shareholders’ equity through the cycle Cost efficiency ratio 48 – 52% 47.9% Tier 1 ratio (Basel II) 7.5 – 10.0% 10.1% 30
Slide 31: Recognition
Recognition Best Global Best Bond Bond House Domestic Best Global Bank Bank of the Year Debt House House of the Year Bond House Best Global Best Global Transaction Supply Chain Best Factoring Best Bank for Islamic Bond Best Sukuk Sterling Bond Banking House Finance Provider Institution Islamic Finan
Slide 32: Appendix
Appendix HSBC <> The world’s local bank
Slide 33: Appendix contents
Appendix contents Managing balance sheet risk 34 Movement in Group consolidated assets 34 Overview of Group consolidated assets 35 Credit quality (PFS) 36 Credit quality (CMB) 37 Write-downs and impairments in Global Banking and Markets 38 Available-for-sale (AFS) Asset-Backed Securities (ABS) 39 AF
Slide 34: Movement in Group consolidated assets
Managing balance sheet risk Movement in Group consolidated assets US$bn 2,6521 -9% 149 2,422 313 149 Other 353 448 Financial investments 414 Trading assets 525 311 Derivatives Loans and advances to customers 983 925 Interbank and cash 234 270 31 Dec 08 30 Jun 09 Note: (1) Restated at constant curren
Slide 35: Overview of Group consolidated assets
Managing balance sheet risk Overview of Group consolidated assets 1H09, US$bn Derivatives Trading assets US$bn Financial investments US$bn 37% decrease in fair value Reverse repos, settlement Government bills / securities 130 4% decrease in notional value accounts, stock borrowing and other Debt sec
Slide 36: Credit quality: Personal Financial Services
Managing balance sheet risk Credit quality Loan impairment US$m % of avg advances annualised charges and other credit risk provisions 1H08 2H08 1H09 1H08 2H08 1H09 Personal Financial Services Europe 963 1,008 982 1.28 1.40 1.50 Hong Kong 34 100 122 0.17 0.48 0.59 Rest of Asia-Pacific 310 330 375 2.0
Slide 37: Credit quality: Commercial Banking
Managing balance sheet risk Credit quality Loan impairment US$m % of avg advances annualised charges and other credit risk provisions 1H08 2H08 1H09 1H08 2H08 1H09 Commercial Banking Europe 285 582 606 0.53 1.14 1.41 Hong Kong 28 307 137 0.20 1.92 0.99 Rest of Asia-Pacific 7 130 151 0.06 1.08 1.41 M
Slide 38: Write-downs and impairments in Global Banking and Markets
Managing balance sheet risk Write-downs and impairments in Global Banking and Markets Write-down/(recovery) Carrying amount at end US$m 1H08 2H08 1H09 Jun 08 Dec 08 Jun 09 Sub-prime mortgage related assets – Loan securitisation 301 292 156 1,565 1,213 943 – Credit trading 665 150 83 1,377 428 302 Ot
Slide 39: Available-for-sale Asset-Backed Securities
Managing balance sheet risk Available-for-sale (AFS) Asset-Backed Securities (ABS) Carrying value AFS reserve First loss protection US$bn 31 Dec 08 30 Jun 09 31 Dec 08 30 Jun 09 SICs US$2.2bn Government 20.3 14.1 0.3 0.1 agency Carrying value AFS reserve Sector (US$bn) 31 Dec 08 30 Jun 09 31 Dec 08
Slide 40: AFS ABS stress testing
Managing balance sheet risk AFS ABS stress testing 1H09, US$m Stress test 2009+, US$m Impairments 539 Impairments 2,000 - 2,500 Expected Expected 148 600 - 800 losses losses 40
Slide 41: Movements in FV on own debt
Movements in FV on own debt1 HSBC Finance HSBC Holdings plc and HSBC Bank Plc 2 5yr SNR CDS Historical spread Euro 5yr Sub CDS historical spread2 US$bn US$bn 1400 400 1200 350 300 1000 250 800 200 600 150 400 100 200 50 0 0 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08
Slide 42: Hong Kong
Hong Kong % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 5,108 5,046 4,714 -8 -7 Loan impairment charges and other credit risk provisions (81) (684) (273) +237 -60 Net operating income 5,027 4,362 4,441 -12 +2 Total operating expenses (1,975) (1,968) (1
Slide 43: Hong Kong: business mix
Hong Kong Business mix, 1H09 Business mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m 4,009 US$m % share 144 3,073 Personal Financial Services 1,337 53 3,330 123 881 Commercial Banking 424 17 161 770 Global Banking and Markets 907 36 697 2,501 859 2,388 Private Banking 1
Slide 44: Rest of Asia-Pacific
Rest of Asia-Pacific % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 4,535 4,446 4,009 -12 -10 Loan impairment charges and other credit risk provisions (328) (524) (531) +62 +1 Net operating income 4,207 3,922 3,478 -17 -11 Total operating expenses (2,32
Slide 45: Rest of Asia-Pacific: business mix
Rest of Asia-Pacific Business mix, 1H09 Business mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m 142 (7%) 2,738 47 (2%) 135 (7%) 2,634 122 57 52 459 (23%) 2,088 1,964 140 2,022 1,076 58 57 142 34 5 47 1,546 55 1,239 (61%) US$2,022m 1,087 1,424 1,239 882 Customer lending,
Slide 46: Middle East
Middle East % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 1,306 1,362 1,369 +4 +1 Loan impairment charges and other credit risk provisions (41) (238) (391) +854 +64 Net operating income 1,265 1,124 978 -23 -13 Total operating expenses (460) (499) (482)
Slide 47: Middle East: business mix
Middle East Business mix, 1H09 Business mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m 47 (7%) 35 (5%) 5 (1%) 990 45 2 252 (39%) 756 304 (47%) 701 426 34 2 38 643 606 2 US$643m 47 44 5 1 279 390 216 304 Customer lending, 30 Jun 09 308 220 262 6.6 (26%) 250 6.8 (27%) 252
Slide 48: Latin America
Latin America % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 5,455 5,058 4,452 -18 -12 Loan impairment charges and other credit risk provisions (1,170) (1,322) (1,385) +18 +5 Net operating income 4,285 3,736 3,067 -28 -18 Total operating expenses (3,023
Slide 49: Latin America: business mix
Latin America Business mix, 1H09 Business mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m US$m % share 1,266 Personal Financial Services (125) (21) 1,178 8 11 Commercial Banking 221 38 15 1,000 383 Global Banking and Markets 480 83 10 264 Private Banking 4 0 253 771 Othe
Slide 50: North America
North America1 % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 9,599 11,580 9,190 -4 -21 Loan impairment charges and other credit risk provisions (7,166) (9,629) (8,538) +19 -11 Net operating income 2,433 1,951 652 -73 -67 Total operating expenses1 (4,80
Slide 51: North America: business mix
North America1 Business mix, 1H09 Business mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m US$m 2,435 Personal Financial Services (2,843) 436 60 477 3,240 Commercial Banking 224 1,534 1,488 294 23 Global Banking and Markets 477 (26) 114 58 25 477 443 430 228 224 Private
Slide 52: Europe
Europe % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 14,641 16,038 12,354 -16 -23 Loan impairment charges and other credit risk provisions (1,272) (2,482) (2,813) +121 +13 Net operating income 13,369 13,556 9,541 -29 -30 Total operating expenses (8,193
Slide 53: Europe: business mix
Europe Business mix, 1H09 Business mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m US$m % share 5,692 Personal Financial Services 212 7 Commercial Banking 852 29 5,177 Global Banking and Markets 2,891 97 4,545 144 579 2,976 Private Banking 447 15 4,050 43 1,013 5,152 447
Slide 54: Profit / (loss) before tax by country / territory
Profit / (loss) before tax by country / territory % change vs US$m 1H08 2H08 1H09 1H08 2H08 Hong Kong 3,073 2,388 2,501 -19 +5 Rest of Asia-Pacific 2,634 2,088 2,022 -23 -3 Australia 100 76 84 -16 +11 India 371 295 201 -46 -32 Indonesia 66 55 80 +21 +45 Japan 4 0 (8) n/a n/a Total mainland China 907
Slide 55: Profit / (loss) before tax by country / territory
Profit / (loss) before tax by country / territory % change vs US$m 1H08 2H08 1H09 1H08 2H08 Latin America 1,266 771 580 -54 -25 Argentina 119 105 117 -2 +11 Brazil 660 250 214 -68 -14 Mexico 385 329 177 -54 -46 Panama 63 58 73 +16 +26 Other Latin America 39 29 (1) n/a n/a North America1 (2,366) (2,5
Slide 56: Personal Financial Services
Personal Financial Services % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 22,422 19,067 17,883 -20 -6 Loan impairment charges and other credit risk provisions (9,384) (11,836) (10,673) +14 -10 Net operating income 13,038 7,231 7,210 -45 0 Total operati
Slide 57: Personal Financial Services: regional mix
Personal Financial Services Regional mix, 1H09 Regional mix, 1H07 – 1H091 Profit / (loss) before tax Profit / (loss) before tax, US$m US$m Hong Kong 1,337 4,729 1,171 2,840 RoAP 135 1,488 977 1,324 Middle East 35 Latin America (125) 604 505 120 468 209 388 289 326 Europe 212 226 125 334 200 212 2,31
Slide 58: Commercial Banking
Commercial Banking % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 8,156 7,161 6,344 -22 -11 Loan impairment charges and other credit risk provisions (563) (1,610) (1,509) +168 -6 Net operating income 7,593 5,551 4,835 -36 -13 Total operating expenses (3
Slide 59: Commercial Banking: regional mix
Commercial Banking Regional mix, 1H09 Regional mix, 1H07 – 1H09 Profit before tax Profit before tax, US$m 4,611 US$m 424 430 Hong Kong RoAP 459 3,723 Middle East 252 3,422 443 Latin America 221 1,940 477 Europe 852 2,583 North America 224 1,280 2,432 228 Total operating income 2,432 1,236 224 411 78
Slide 60: Global Banking and Markets
Global Banking and Markets % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 7,379 6,139 12,231 +66 +99 Loan impairment charges and other credit risk provisions (115) (1,356) (1,732) n/a +28 Net operating income 7,264 4,783 10,499 +45 +120 Total operating
Slide 61: Global Banking and Markets: regional mix
Global Banking and Markets Regional mix, 1H09 Regional mix, 1H07 – 1H09 Profit / (loss) before tax Profit / (loss) before tax, US$m 6,298 477 (7%) 907 (14%) 477 1,239 (20%) 4,158 2,690 2,891 2,891 (46%) 436 1,963 1,190 304 (5%) 793 1,674 853 383 480 (8%) 258 480 US$6,298m 264 426 390 304 253 279 216
Slide 62: Private Banking
Private Banking % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 1,916 1,715 1,589 -17 -7 Loan impairment charges and other credit risk provisions 4 (72) (14) n/a -81 Net operating income 1,920 1,643 1,575 -18 -4 Total operating expenses (1,098) (1,018) (
Slide 63: Private Banking: regional mix
Private Banking Regional mix, 1H09 Regional mix, 1H07 – 1H09 Profit before tax Profit before tax, US$m 822 23 (4%) 780 106 (17%) 58 731 60 47 (7%) 114 625 632 5 23 4 25 447 (71%) 493 579 US$632m 422 419 447 Customer lending, 30 Jun 09 1 10 4.6 (14%) 3.1 (9%) 55 2 15 2 8 28 34 52 57 5 4 2.7 (8%) 47 0
Slide 64: HSBC Finance Corporation: 1H09 Financial Results
HSBC Finance Corporation 1H09 Financial Results % change vs US$m 1H08 2H08 1H09 1H08 2H08 Net operating income before loan impairment charges 7,421 6,317 6,734 -9 +7 (excluding movements in FV on own debt) Loan impairment charges and other credit risk provisions (6,581) (8,766) (7,308) +11 -17 Total
Slide 65: Continued reduction of customer loans in the US
HSBC Finance Corporation Continued reduction of customer loans in the US Customer Loans1, US$bn 2+ Delinquency2 180 20 14% 167.9 167.3 161.0 156.6 160 150.8 16.5 16.6 16.3 12% 147.0 138.6 3 16 12.0% 140 131.3 12.4% 13.8 11.2% 10% 120 11.9 12.3 12.4 12 9.2% 8% 100 9.8 7.7% 7.9% 80 7.1% 6% 8 5.8% 60 4
Slide 66: US Mortgages: continuing to shrink the mortgage portfolio
HSBC Finance Corporation US Mortgages – continuing to shrink the mortgage portfolio Mortgage Services, US$bn Consumer Lending, US$bn 60 60 49.9 50.2 49.9 49.0 Customer loans 47.3 46.2 45.1 50 50 43.7 38.9 36.2 40 33.9 31.5 40 29.0 27.6 30 26.3 25.0 30 20 20 10 10 0 0 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q
Slide 67: Impairment allowance: real estate secured
HSBC Finance Corporation Impairment allowance – real estate secured Mortgage Services, US$m Consumer Lending, US$m 4,500 4,500 913 4,315 4,000 936 666 3,819 723 4,000 854 3,771 (36) 360 3,508 3,500 1,318 3,403 3,500 (24) (2) (463) 3,000 (650) (647) 3,000 (723) (392) (868) 992 2,500 2,500 2,000 2,000
Slide 68: Managing risk in Card and Retail Services
HSBC Finance Corporation Managing risk in Card and Retail Services Credit Card, US$bn Private Label, US$bn 40 40 Customer loans 29.9 31.0 29.4 29.3 29.0 28.6 30 26.3 25.1 30 17.7 18.7 17.4 17.4 17.5 18.0 20 20 16.4 15.8 10 10 0 0 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Slide 69: Impairment allowance: Card and Retail Services
HSBC Finance Corporation Impairment allowance – Card and Retail Services Card and Retail Services, US$m 5,000 1,509 1,542 4,384 4,500 1,205 4,297 1,492 (94) 4,000 (29) 3,617 3,500 3,000 (1,305) (1,467) (1,143) 2,500 (1,030) 2,000 1,500 1,000 500 0 Jun 08 3Q 3Q 4Q 4Q Other Dec 08 1Q 1Q 2Q 2Q Other Ju
Slide 70: Personal non-credit card risk and Vehicle Finance run-off
HSBC Finance Corporation Manage personal non-credit card risk and Vehicle Finance run-off Personal Non-Credit Card, US$bn Vehicle Finance1, US$bn 30 30 Customer loans 18.5 18.1 17.5 20 20 16.8 16.2 15.7 15.0 13.8 12.9 12.9 12.8 12.5 11.8 10.7 9.5 10 10 7.7 0 0 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Slide 71: 2+ Delinquency
HSBC Finance Corporation 2+ Delinquency1,2 Core Portfolio, US$bn Total HSBC Finance Corp, US$bn 4 20% 20 20% 2.7 2.8 3 2.4 2.4 2.3 2.5 2.5 15% 2.1 16.5 16.6 16.3 2 10% 1 6.6% 6.2% 5% 15 15% 4.9% 5.4% 5.8% 13.8 4.4% 5.1% 4.9% 0 0% 12.3 12.4 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 11.9 12.4% 9.8 12.0%
Slide 72: Loan impairment charges
HSBC Finance Corporation Loan impairment charges1,2 Core Portfolio, US$bn Total HSBC Finance Corp, US$bn 2 1.5 1.5 1.5 15% 5 15% 1.2 4.6 4.6 1.4 1.2 1.0 1.0 12.8% 13.3% 13.4% 10% 4.2 11.3% 1 10.6% 11.5% 8.8% 8.5% 3.9 5% 4 12.3% 3.4 3.4 3.3 3.2 0 0% 10.9% 10.8% 10% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
Slide 73: Amount written-off
HSBC Finance Corporation Amount written-off1,2 Core Portfolio, US$bn Total HSBC Finance Corp, US$bn 2 1.5 15% 4 15% 1.3 1.0 1.1 14.0% 1.0 1.0 11.6% 10% 3.4 3.3 1 0.7 0.8 9.9% 8.9% 8.8% 8.0% 5% 3.0 5.7% 6.6% 3 2.9 2.9 0 0% 2.6 10% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 10.1% 9.3% 2.0 Run-off Portfol
Slide 74: Impairment allowances
HSBC Finance Corporation Impairment allowances1,2 Core Portfolio, US$bn Total HSBC Finance Corp, US$bn 5 4.1 4.4 4.6 4.3 15% 20 15% 4 3.4 3.4 3.6 2.8 10% 3 10.7% 10.5% 8.8% 9.4% 2 7.7% 15.2 15.1 6.8% 7.3% 5% 14.7 1 5.9% 15 13.1 11.5% 0 0% 11.0% 10% 11.7 12.1 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 1