HBC » Topics » Credit quality

This excerpt taken from the HBC 6-K filed Nov 10, 2008.


HUSI enters into a variety of transactions in the normal course of business that involve both on and off-balance sheet credit risk. Principal among these activities is lending to various commercial, institutional, governmental and individual customers. HUSI participates in lending activity throughout the U.S. and, on a limited basis, internationally.
HUSI’s allowance for credit losses methodology and its accounting policies related to the allowance for credit losses are presented in Critical Accounting Policies beginning on page 25 of its 2007 Form 10-K and in Note 2 of the consolidated financial statements beginning on page 103 of its 2007 Form 10-K.
HUSI’s approach toward credit risk management is summarized on pages 77-78 of its 2007 Form 10-K. There have been no material revisions to policies or methodologies during the third quarter of 2008, although the company continues to monitor current market conditions and will adjust credit policies as deemed necessary.


The allowance for credit losses increased $263 million (15%) and increased $645 million (46%) during the three month and nine month periods ended September 30, 2008, respectively. Allowance for credit losses balances and activity, by loan portfolio, are summarized on page 76 of this Form 10-Q.
The provision for credit losses increased $256 million (64%) for the third quarter of 2008, and increased $891 million (102%) for the first nine months of 2008 as compared with the same 2007 periods. The provision for credit losses associated with various loan portfolios is presented in the “Results of Operations” section of this Form 10-Q under the caption “Provision for Credit Losses”.

This excerpt taken from the HBC 20-F filed Mar 20, 2006.

Credit quality

Loans and advances

Distribution of loans and advances by credit quality (Audited IFRS 7 information)

  At 31 December 2005  

  Loans and   Loans and  
  advances to   advances to  
  customers   banks  
  US$m   US$m  
Loans and advances:        
    – neither past due nor impaired 731,116   125,930  
    – past due but not impaired 8,797   22  
    – impaired 11,446   22  
  751,359   125,974  


Nov 10, 2008
Mar 20, 2006
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