HSBC Holdings PLC · LSE:HSBA
HSBC — FY2008 Earnings Presentation
78 slides from HSBC's earnings presentation, Mar 3, 2009
Slide 1: HSBC Holdings plc Annual Results 2008
HSBC Holdings plc Annual Results 2008 Presentation to Investors and Analysts
Slide 2: Forward-looking statements
Forward-looking statements ADVERTISEMENT This presentation is an advertisement and not a prospectus and investors should not acquire shares or interests in shares pursuant to the proposed 5 for 12 rights issue to ordinary shareholders of HSBC Holdings plc (the “Company”) (the “Rights Issue”) except
Slide 3: 2008 performance highlights
2008 performance highlights
Slide 4: Performance in 2008
Performance in 2008 Group strength delivered resilient performance Profit before tax Attributable profit US$9.3bn, down 62% US$5.7bn, down 70% (US$19.9bn, down 18%, excluding goodwill (US$16.3bn, down 15%, excluding goodwill impairment) impairment) Earnings per share Return on total shareholders’ eq
Slide 5: Performance in 2008: profitable in all regions except North America
Performance in 2008 Profitable in all regions, except North America Profit before tax, US$m 2007 2008 % change Asia 13,348 11,929 -11 – Excluding dilution gains 12,267 11,929 -3 Latin America 2,178 2,037 -6 Europe 8,595 10,869 +26 Total (excluding North America) 24,121 24,835 +3 North America (exclu
Slide 6: Performance in 2008: profitable in all customer groups except PFS
Performance in 2008 Profitable in all customer groups, except Personal Financial Services % Profit before tax, US$m 2007 2008 change Personal Financial Services (excluding goodwill impairment) - Group excluding US 7,724 6,390 -17 - US (1,824) (6,800) -273 5,900 (410) n/a Commercial Banking 7,145 7,1
Slide 7: Financial performance in 2008
Financial performance in 2008
Slide 8: Financial overview: summary of results
Financial overview Summary of results US$m 2007 2008 % change Net operating income before loan impairment charges 78,993 81,682 +3 Loan impairment charges and other credit risk provisions (17,242) (24,937) +45 Net operating income 61,751 56,745 -8 Total operating expenses (excluding goodwill impairm
Slide 9: Financial overview: significant factors
Financial overview Significant factors US$bn 2007 2008 Dilution gains1 1.1 – Goodwill impairment – (10.6) Fair value on own debt credit spread 3.1 6.6 Global Banking and Markets trading write-downs2 (2.1) (5.4) Debt securities impairments2 – (0.7) Madoff related charge (in equities business)3 – (1.0
Slide 10: Underlying growth, 2008 vs 2007
Financial overview Underlying growth, 2008 vs 2007 2007 2008 % US$m restated1 restated2 change Net operating income before loan impairment 76,648 78,266 +2 charges Loan impairment charges and other credit risk (17,098) (24,931) +46 provisions Net operating income 59,550 53,335 -10 Total operating ex
Slide 11: Underlying growth, 2H08 vs 1H08
Financial overview Underlying growth, 2H08 vs 1H08 1H08 2H08 % US$m restated1 restated change Net operating income before loan impairment 36,413 39,664 +9 charges Loan impairment charges and other credit risk (9,754) (14,879) +53 provisions Net operating income 26,659 24,785 -7 Total operating expen
Slide 12: Funding and liquidity
Funding and liquidity Improving the advances to deposits ratio US$bn 20071 2008 % change1 Customer loans and 857 933 +9 advances Customer accounts 958 1,115 +16 Advances to deposits 89.5% 83.6% ratio Note: (1) Adjusted for constant currency and acquisitions & disposals 12
Slide 13: Managing balance sheet risk: consolidated assets
Managing balance sheet risk Overview of Group consolidated assets 2008, US$bn Derivatives Trading assets US$bn Financial investments US$bn 163% increase in fair value Reverse repos, settlement Government bills / securities 94 8% increase in notional value accounts, stock borrowing and other Debt sec
Slide 14: Managing balance sheet risk: credit quality
Managing balance sheet risk Credit quality US$m % of%avg of average advances advances annualised Loan impairment charges and other credit risk provisions 2007 2008 2007 2008 Personal Financial Services 16,172 21,220 3.53 4.79 – Europe 2,044 1,971 1.37 1.36 – Hong Kong 175 134 0.45 0.33 – Rest of Asi
Slide 15: Write-downs and impairments in Global Banking and Markets
Managing balance sheet risk Write-downs and impairments in Global Banking and Markets Carrying Carrying 2007 amount at 2008 amount at US$m write-downs 31 Dec 07 write-downs 31 Dec 08 Sub-prime mortgage related assets – Loan securitisation 529 1,965 593 1,213 – Credit trading 463 1,700 815 428 Other
Slide 16: Available-for-sale Asset-Backed Securities
Managing balance sheet risk Available-for-sale (AFS) Asset-Backed Securities (ABS) Carrying AFS US$bn, 31 Dec 08 value reserve First loss protection Government agency 20.3 0.3 SICs US$2.2bn Structured Investment 14.6 (7.2) Conduits (SICs) Sector Carrying AFS (US$bn) value reserve Other 21.3 (11.8) R
Slide 17: AFS ABS stress testing
Managing balance sheet risk AFS ABS stress testing 2008, US$m Stress test 2009+, US$m 2,000 - Impairments 279 Impairments 2,500 Expected Expected 86 600 - 800 losses losses • Stress test performed, eg increasing the net impact of expected loss and prepayment rates for Alt-A securities by between one
Slide 18: Business performance in 2008
Business performance in 2008
Slide 19: Overview: resilience in extraordinary times
Overview Resilience in extraordinary times 2008 Target range Reported Excl. goodwill1 Return on total shareholders’ 15 – 19% 4.7% 13.3% equity through the cycle Cost efficiency ratio 48 – 52% 60.1% 47.2% Tier 1 capital (Basel II) 7.5 – 9.0% 8.3% Total shareholder Above peer group return Ranked 4th a
Slide 20: Core business highlights – Asia
Core business highlights – Asia Maintained profits Profit before tax: US$11,929m, down 3%1 from 2007 Customer group, US$m, (% change from 2007) Main geographies, US$m, (% change from 2007)1 Private Other US$679m (n/a) Middle Banking East (-12%) (+34%) Personal 350 Financial Services 1,746 Global 3,9
Slide 21: Core business highlights – Europe
Core business highlights – Europe Financial and brand strength help results in Europe Profit before tax: US$10,869m, up 26% from 2007; US$5,573m, down 26% from 2007 excluding ‘Other’1 Customer group, US$m, (% change from 2007) Main countries, US$m, (% change from 2007)1 Malta US$142m (-10%) Private
Slide 22: Core business highlights: open for business in core markets
Core business highlights Open for business in core markets UK, US$bn Hong Kong, US$bn PFS and CMB balances1 PFS and CMB balances1 +17% +10% +12% 190 +11% 200 163 72 Customer loans and Customer accounts Customer loans and Customer accounts advances advances Profit before tax1 Profit before tax1 -19%
Slide 23: Core business highlights – Latin America
Core business highlights – Latin America Restrained by weaker credit quality Profit before tax: US$2,037m, down 6% from 2007 Customer group, US$m, (% change from 2007) Main countries, US$m, (% change from 2007) Private Other US$6m (+100%) Panama Other Banking (+41%) (+113%) (-36%) 16 Personal Argent
Slide 24: Core business highlights – Global Banking and Markets
Core business highlights – Global Banking and Markets Strength in core activities helps absorb market turmoil impact • Remained profitable in 2008 with the successful US$m 2007 2008 % chg focus on the ‘emerging markets-led, financing Net operating income before focused’ strategy loan impairment char
Slide 25: Core business highlights – Private Banking
Core business highlights – Private Banking The world’s private bank • A more conservative stance by clients caused a US$m 2007 2008 % chg modest decline in profits Net operating income before • An increase in customer deposits in Switzerland, loan impairment charges 3,548 3,631 +2 the UK and Hong Ko
Slide 26: Core business highlights – Insurance
Core business highlights – Insurance Affected by weak equity markets PBT by region, 2008 & 2007 • Insurance contributed US$2.6bn, down 19% on 2007 • Strong bancassurance performance: 1.5 – Net earned premiums up 20% to US$10.9bn (US$bn) 1.0 – Europe up 32%1 – Asia up 14% 0.5 – Latin America up 8% 0.
Slide 27: North America restructuring
North America restructuring
Slide 28: North America results
North America results Business under continued pressure Profit before tax, US$m 2007 2008 United States – Personal Financial Services (excluding goodwill impairment) (1,824) (6,800) – Commercial Banking 377 226 – Global Banking and Markets (1,243) (2,899) – Private Banking 156 67 – Other 1,468 3,427
Slide 29: HSBC Finance Corporation run-off portfolio
HSBC Finance Corporation Run-off portfolio: US$100bn Customer loans1, US$bn • The run-off portfolio decreased 15% from 125.5 121.6 120.3 117.6 December 2007, reflecting Run-off portfolio 114.2 109.9 18.4 18.5 104.3 100.4 actions to reduce risk and 18.5 18.1 17.5 16.8 16.2 15.7 slow growth 47.6 48.8
Slide 30: HSBC Finance Corporation – Run-off portfolios
HSBC Finance Corporation – Run-off portfolios Mortgage Services and Vehicle Finance Customer loans1 Continued progress Mortgage Services, US$bn • Mortgage Services portfolio reduced from 46.7 41.5 38.9 US$36.2bn to 36.2 33.9 31.5 29.0 27.6 US$27.6bn in 2008 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Ve
Slide 31: HSBC Finance Corporation – Consumer Lending
HSBC Finance Corporation – Consumer Lending Ceasing to write new business Customer loans1 • Sub-prime mortgage refinance model no longer operates effectively Real estate secured consumer lending, US$bn – lack of home equity – deteriorating outlook for house price appreciation – very limited refinanc
Slide 32: HSBC US Card and Private Label
HSBC US Card and Private Label A core business Customer loans, US$bn • Card and Private Label loan balances decreased 8% and 49.7 4% respectively in 2008 as 45.1 46.7 47.6 46.8 46.7 46.5 46.6 we tightened underwriting and reduced mailings 17.7 18.7 • Reviewed card merchant 17.4 17.4 17.4 17.5 18.0 1
Slide 33: Joining up the Company
Joining up the Company Cost management Staff engagement Brand One HSBC 33
Slide 34: Key highlights
Key highlights • Resilient performance in extraordinary times • Strong advances to deposits ratio • All business lines and regions profitable except for the North America business • Protected our business and supported our clients • Restructured US consumer finance business • Continued progress in J
Slide 35: Rights Issue
Rights Issue HSBC <> The world’s local bank
Slide 36: Background to the Rights Issue
Background to the Rights Issue Unprecedented times • Changing economic and financial environment – Unprecedented turmoil with major uncertainties ahead – Financial system remains under stress • Capital increases by competitors – Significant government capital injections – Capital raising from shareh
Slide 37: Reasons for the Rights Issue
Reasons for the Rights Issue Strengthen competitive positioning Progress on strategy Reasons for Rights Issue • Concentrating on core emerging • Adds to strong planned internal capital markets and faster-growing businesses generation – Restructuring of loss-making operations • Capital raising enhanc
Slide 38: 2008 Dividends
2008 Dividends Dividend payout from cash earnings • Fourth interim dividend of US$m US$0.10 per ordinary share, excluding rights shares Earnings attributable to ordinary 5,546 • Total distribution in respect of shareholders 2008 of US$0.64 per ordinary Adjust for: share – Goodwill impairment 10,564
Slide 39: 2009 Dividends
2009 Dividends Rebasing and pursuing progressive dividends • Rebasing dividends to reflect enlarged share capital, prevailing business conditions and capital requirements – Fifteen years of dividend growth of 10% or more per annum up to 2007 – Rebased dividend reflects uncertain environment and desi
Slide 40: Capital impact
Capital impact Raising the top end of target tier 1 ratio range to 7.5 - 10.0% 12% 10% 9.8% 8.3% 1.3% 8% 1.3% 6% US$17.7bn capital 7.0% 8.5% 4% increase 2% 0% Dec 2008 Pro forma Dec 2008 Core equity tier 1 Non-core equity tier 1 40
Slide 41: Proposed transaction
Proposed transaction Maintaining signature financial strength • Raising US$17.7bn (net of expenses) by fully underwritten Rights Issue • 5 new ordinary shares for 12 existing ordinary shares • Representing 42% of existing ordinary shares in issue and 29% of enlarged ordinary share capital • Issue pr
Slide 42: Expected timetable of principal events
Expected timetable of principal events Launch 02 March 2009 Posting of circular 03 March 2009 General Meeting 19 March 2009 Rights offer period in the UK 20 March – 03 April 2009 Dealings in New Ordinary Shares, fully paid in the UK 06 April 2009 New Ordinary Shares credited to CREST accounts 06 Apr
Slide 43: Conclusion and outlook
Conclusion and outlook Group strengthened and well-placed in today’s environment Performance and outlook Confidence in HSBC • Resilient performance in 2008 • Maintaining HSBC’s signature financial strength – Profitable from a broad-based earnings platform – Strong internal capital generation – Finan
Slide 44: Appendix
Appendix HSBC <> The world’s local bank
Slide 45: Appendix contents
Appendix contents Underlying growth, 2008 vs 2007 46 Underlying growth, 2H08 vs 1H08 47 Asia 48 Hong Kong 49 Rest of Asia-Pacific (excluding Middle East) 50 Middle East 51 Latin America 52 North America 53 Europe 54 Profit (loss) before tax by country / territory 55 Personal Financial Services 57 Co
Slide 46: Underlying growth, 2008 vs 2007
Underlying growth 2008 vs 2007 2007 restated at Dilution % constant gains / 2007 Acquisitions Underlying underlying US$m currency disposals restated1 & disposals change 2008 change Net operating income before loan 78,508 (1,860) 76,648 3,416 1,618 81,682 +2 impairment charges Loan impairment charges
Slide 47: Underlying growth, 2H08 vs 1H08
Underlying growth 2H08 vs 1H08 1H08 restated at Dilution % constant gains / 1H08 Acquisitions Underlying underlying US$m currency disposals restated1 & disposals change 2H08 change Net operating income before 37,154 (741) 36,413 2,543 3,251 42,207 +9 loan impairment charges Loan impairment charges a
Slide 48: Asia
Asia Business mix Growth in profit (loss) before tax (%)1 Profit (loss) before tax, 2008, US$m 2008 vs 2007 Other -679 (-6%) 350 (3%) Personal Financial -21 Services 3,928 (33%) 5,222 (44%) Commercial +5 Banking 3,108 (26%) US$11,929m Global Banking +29 and Markets Customer lending, 31 Dec 08, US$bn
Slide 49: Hong Kong
Hong Kong Business mix Growth in profit (loss) before tax (%) Profit (loss) before tax, 2008 US$m % share 2008 vs 2007 Personal Financial Services 3,428 63% Commercial Banking 1,315 24% Personal Financial -19 Services Global Banking and Markets 1,436 26% Private Banking 237 4% Commercial -19 Banking
Slide 50: Rest of Asia-Pacific (excluding Middle East)
Rest of Asia-Pacific (excluding Middle East) Business mix Growth in profit before tax (%)1 Profit before tax, 2008, US$m 2008 vs 2007 197 (4%) 211 (5%) Personal Financial -59 109 (2%) Services 1,235 (26%) Commercial +42 Banking 2,970 (63%) US$4,722m Global Banking +51 and Markets Customer lending, 3
Slide 51: Middle East
Middle East Business mix Growth in profit before tax (%) Profit before tax, 2008, US$m 2008 vs 2007 79 (4%) 4 (0%) 289 (17%) Personal Financial +18 Services 816 (47%) Commercial Banking +16 558 (32%) US$1,746m Global Banking +65 and Markets Customer lending, 31 Dec 08, US$bn Private Banking: US$0.03
Slide 52: Latin America
Latin America Business mix Growth in profit before tax (%) Profit before tax, 2008, US$m 2008 vs 2007 16 (1%) 6 (0%) Personal Financial -25 Services 668 (33%) 641 (31%) Commercial -5 Banking 706 (35%) US$2,037m Global Banking +24 and Markets Customer lending, 31 Dec 08, US$bn Private Banking: US$0.0
Slide 53: North America
North America Business mix Growth in profit (loss) before tax (%) Profit (loss) before tax, 2008 US$m 2008 vs 2007 Personal Financial Services (17,228) Commercial Banking 658 Personal Financial Services n/a Global Banking and Markets (2,575) Private Banking 83 Commercial Banking -28 Other 3,534 Tota
Slide 54: Europe
Europe Business mix Growth in profit before tax (%) Profit before tax, 2008, US$m 2008 vs 2007 1,658 (15%) Personal Financial +5 Services 5,296 (49%) 2,722 (25%) Commercial Banking +8 195 (2%) 998 (9%) US$10,869m Global Banking and Markets -92 Customer lending, 31 Dec 08, US$bn 0.5 (0%) Private Bank
Slide 55: Profit (loss) before tax by country / territory
Profit (loss) before tax by country / territory % change US$m 2007 2008 vs 2007 Hong Kong 7,339 5,461 -26 Rest of Asia-Pacific (including Middle East) 6,009 6,468 +8 Australia 124 176 +42 India 529 666 +26 Indonesia 104 121 +16 Japan 43 4 -91 Total mainland China 2,361 1,605 -32 – Associates 2,180 1
Slide 56: Profit (loss) before tax by country
Profit (loss) before tax by country % change US$m 2007 2008 vs 2007 Latin America 2,178 2,037 -6 Mexico 980 714 -27 Brazil 879 910 +4 Argentina 201 224 +11 Panama 86 121 +41 Other Latin America 32 68 +113 North America1 91 (15,528) n/a United States1 (1,066) (16,543) n/a Canada 983 839 -15 Bermuda 1
Slide 57: Personal Financial Services
Personal Financial Services Regional mix Change in profit (loss) before tax (%) Profit (loss) before tax, 2008 US$m 2008 vs 2007 Asia 3,928 Latin America 668 Asia -21 Europe 1,658 North America (17,228) -25 Latin America Total (10,974) Customer lending, 31 December 2008, US$bn Europe +5 76.3 (19%) 1
Slide 58: Commercial Banking
Commercial Banking Regional mix Growth in profit before tax (%) Profit before tax, 2008 US$m 2008 vs 2007 658 (9%) Asia +5 3,108 (43%) 2,722 (38%) Latin America -5 706 (10%) US$7,194m Customer lending, 31 December 2008 US$bn Europe +8 35.7 (17%) 65.5 (32%) North America -28 87.3 (43%) 15.5 (8%) Tota
Slide 59: Global Banking and Markets
Global Banking and Markets Regional mix Growth in profit (loss) before tax (%) Profit (loss) before tax, 2008 US$m 2008 vs 2007 Asia 5,222 Latin America 641 +29 Asia Europe 195 North America (2,575) Latin America +24 Total 3,483 Management view of total operating income, US$bn -92 Europe 2007 2008 G
Slide 60: Private Banking
Private Banking Regional mix Growth in profit before tax (%) Profit before tax, 2008 US$m 2008 vs 2007 83 (6%) 350 (24%) Asia -12 16 (1%) -36 Latin America 998 (69%) US$1,447m Customer lending, 31 December 2008, US$bn +9 Europe Latin America: US$0.031bn (0%) 5.3 (14%) 6.6 (18%) North America -52 Tot
Slide 61: Appendix - HSBC Finance Corporation
Appendix - HSBC Finance Corporation (Extracts from Form 8K: 2008 Results – Presentation)
Slide 62: Key developments
Key developments Consumer and Mortgage Lending (“CML”) Card and Retail Services (“CRS”) ● As part of our continuing evaluation of the strategies ● Executed the sale of our General Motors (“GM”) and opportunities for our operations, on 27 Feb 09, (US$6.4bn) and AFL-CIO Union Plus® card (US$6.1bn) the
Slide 63: Key developments
Key developments Vehicle Finance Insurance and Other ● Terminated all originations of auto loans with ● Introduced simplified issue term life insurance discontinuation of the autos-in-branches with US$500,000 limit program in January 2009. Previously reduced ● As previously disclosed, we completed t
Slide 64: Key developments
Key developments Outreach and assistance to our mortgage Credit quality trend customers ● We continued to experience increases in delinquency dollars and ● Continued to refine and utilize customer account management ratios in the fourth quarter of 2008 as unemployment rose to 7.2 programs with the g
Slide 65: HSBC Finance Corporation – Financial Results
HSBC Finance Corporation – Financial Results % Better (Worse) US$m H2 2007 H1 2008 H2 2008 vs H2 2007 vs H1 2008 Net operating income before loan impairment charges (excluding FVO) 7,398 $7,421 $6,317 (14.6%) (14.9%) FVO 1,409 272 2,652 88.2% 875.0% Loan impairment and other related charges (7,907)
Slide 66: HSBC Finance Corporation – YTD Financial Results
HSBC Finance Corporation – YTD Financial Results % Better (Worse) US$m 2007 YTD 2008 YTD vs 2007 YTD Net operating income before loan impairment charges (excluding FVO) 14,997 13,738 (8.4%) FVO 1,564 2,924 87.0% Loan impairment and other related charges (11,570) (15,347) (32.6%) Net operating income
Slide 67: Reported results summary
Reported results summary • Loss before tax from continuing operations, excluding goodwill impairment was US$3.2bn in 2008 compared to US$0.5bn in the prior year primarily due to increased loan impairment charges as U.S. economic conditions Loss before tax continued to deteriorate, partially offset b
Slide 68: HSBC Finance Corporation: reduction of balance sheet in the U.S.
HSBC Finance Corporation Continued reduction of balance sheet in the U.S. ● Customer loans decreased 12 percent from December 2007 reflecting 180 actions implemented to reduce risk and slow growth 170.6 – Real estate secured loans decreased 15 percent from Q4 2007 (13 percent 168.3 167.9 167.3 Custo
Slide 69: U.S. Mortgages – continuing to shrink the mortgage portfolio
HSBC Finance Corporation U.S. Mortgages – continuing to shrink the mortgage portfolio Mortgage Services, US$bn Consumer Lending, US$bn 60 60 48.8 49.9 50.2 49.9 49.0 Customer Loans 46.7 47.6 47.3 46.2 50 50 41.5 US$bn 38.9 40 36.2 33.9 40 31.5 29.0 27.6 30 30 20 20 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
Slide 70: Impairment allowance – MS and CL real estate secured
HSBC Finance Corporation Impairment allowance – MS and CL real estate secured Mortgage Services, US$m Consumer Lending, US$m 4,500 4,000 4,000 969 912 937 664 3,826 3,500 1,318 3,403 3,520 (59) (3) 3,500 3,000 3,000 (650) (869) 2,500 992 (722) (876) 2,500 2,000 440 (318) 2,000 478 1,500 1,403 1,500
Slide 71: Managing risk in CRS
HSBC Finance Corporation Managing risk in CRS Credit Card, US$bn Private Label, US$bn 40 20 18.7 17.4 17.7 17.5 18.0 17.3 17.4 17.4 Customer Loans 29.3 29.9 31.0 29.4 29.3 29.0 27.8 28.6 30 20 10 10 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 14% 3 14% 2 12% 2+ De
Slide 72: Impairment allowance – CRS
HSBC Finance Corporation Impairment allowance – CRS Card and Retail Services, US$m 5,000 4,500 1,541 4,380 • Reserves at Card and Retail Services 1,491 (104) 4,000 increased from the prior year as a result of 1,236 3,500 3,371 1,024 higher loss estimates from portfolio 3,000 seasoning, higher levels
Slide 73: Personal non-credit card risk and motor vehicle finance run-off
HSBC Finance Corporation Manage personal non-credit card risk and motor vehicle finance run-off Personal Non-Credit Card, US$bn Vehicle Finance, US$bn 30 20 Customer Loans 18.4 18.5 18.5 12.6 12.7 12.9 12.9 12.8 12.5 11.8 18.1 17.5 16.8 10.7 20 16.2 15.7 10 10 0 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
Slide 74: Consumer Lending: real estate loans by vintage and type
Consumer Lending Real estate loans by vintage and type December 2007 December 2008 Second Lien ARM $0.3 bn 7% 8% 85% 87% 7% 6% $0.3 bn Second Lien Fixed $6.5 bn 35% 33% 19% 13% 10% 17% 32% 37% 4% $5.6 bn First Lien ARM $2.7 bn 12% 48% 21% 19% 12% 22% 52% 14% $2.0 bn First Lien Fixed $40.7 bn 26% 25%
Slide 75: Mortgage Services: real estate loans by vintage and type
Mortgage Services Real estate loans by vintage and type December 2007 December 2008 Second Lien ARM $1.8 bn 51% 36% 5% 8% 10% 5% 35% 50% $1.2 bn Second Lien Fixed $4.9 bn 1% 36% 54% 4% 5% 6% 5% 51% 37% 1% $3.2 bn First Lien ARM $14.3 bn 36% 46% 11% 7% 7% 10% 44% 39% $10.1 bn First Lien Fixed 9% 29%
Slide 76: Ongoing areas of focus
HSBC Finance Corporation Ongoing areas of focus • In 2008, we began to reposition the CL business by reducing the exposure to the lower tiers of subprime credit while expanding the lending scope for real estate loans to include both government sponsored enterprise and conforming loans while enhancin
Slide 77: Appendix - Disclaimer
Appendix - Disclaimer HSBC <> The world’s local bank
Slide 78: Disclaimer
Disclaimer This presentation has been prepared by, is the sole responsibility of and is being communicated by HSBC Holdings plc (the “Company“). This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer, or an invit