Investor Presentaiton
Mainland China commercial real estate update
Strategy
Mainland China CRE exposures by booking location and credit quality
At 30 June 2023
Memo:
Mainland
$m
Hong Kong Hong Kong
ROW
Total
China
at 4Q22
Total
9,378
8,076
5,164
1,039
14,279
Strong
Good
Satisfactory
1,425
1,161
1,836
205
3,202
697
747
908
355
2,010
1,269
973
1,756
252
2,981
Sub-standard
2,887
1,891¦
456
214
2,561
Credit impaired
3,100
Allowance for ECL
(1,746)
3,304
(1,981)¦
208
13
(191)
(5)
3,525
(2,177)
Hong Kong booked sub-standard and credit
impaired exposures
Total
$m
exposure
Of which
not secured
ECL
allowance*
c.68%
Sub-standard
1,891
1,587
Credit impaired
3,304
2,549
(174)
(1,742)
Total
5,195
4,137
(1,915)
coverage ratio
against not
secured, credit
impaired
exposures
* On not secured exposures
2023 results
Appendix
Total mainland China CRE exposure $14.3bn, down
$2.5bn vs. 4022, reflecting ongoing de-risking measures
and repayments in the China onshore and Hong Kong
booked portfolios
Hong Kong booked exposures:
$8.1bn, down $1.3bn vs. 4Q22; $7.8bn drawn loans &
advances
$5.2bn (c.65%) is classed as sub-standard and credit
impaired: $4.1bn not secured; $1.1bn secured
Total ECL allowance of $2.0bn, substantially all against the
$4.1bn of not secured exposures; ECL allowance on secured
exposures is minimal due to the nature of security held
Our coverage ratio against not secured, credit impaired
exposures is c.68% (FY22: c.55%)
Our plausible downside scenario was c.$1bn as set out at
FY22; this has reduced due to the 1H23 charge
Property market stress has continued throughout 1H23,
despite the policy measures introduced. We expect market
and credit conditions to remain challenging throughout
2H23
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