HSBC Notes Impaired Loan Spike

HSBC’s impaired LatAm loans increased 37% last year to $2.3bn, fueled by a 32% jump in Mexico, largely in credit cards driven by portfolio growth in personal lending, seasoning and higher delinquency rates. The bank says it has clamped down on underwriting, collection and customer acquisition, but says Mexico was also hit by credit quality deterioration among SMEs as the economy weakened. In Brazil, impaired loans rose by 34% due to growth in personal lending, deterioration in payroll and vehicle finance loan portfolios, and weakness in a number of real estate portfolios and corporates exposed to the sharp rise in the value of the US dollar in the second half of the year, says HSBC. The increase was less than last year, when LatAm new loan impairment charges rose by 63% to $2.0bn.