Investor Presentaiton

HSBC France Asset structure and quality Gross loans and advances to customers, €bn 45.4 45.3 42.0 1 39.2 2015 2016 I I 2017 I 1H18 Impaired loans as a % of gross loans and advances to customers LICS as a % of total gross loans and advances to customers Impairment ratio 18 3.4% IAS 39 IFRS 9 (Impaired) (Stage 3) 0.31% 2.9% 2.3% 2.1% 55% 55% 0.17% IAS 39 (LICs) IFRS 9 (ECL) 0.18% la lu. 51% 52% 0.07% 2015 2016 2017 1H18 2015 2016 2017 1H18 Gross loans and advances to customers by lending type Non-bank financial institutions Residential mortgages 5.3% Other commercial 3.8% 18.4% Credit logement 19 24.3% € 45.4bn Commercial 10.5% real estate 6.3% Other personal ■ HSBC France has a conservative approach to risk management, consistent with the Group ■ HSBC France has a high quality lending portfolio, with 82% of gross loans to customers of 'Strong' or 'Good' credit quality in 2017 Impaired loans and LICs as a % of gross loans and advances to customers showing a decreasing trend over 2015 to 2017, and its 2018 ECL as a % of gross loan underlines the portfolio quality The impairment ratio continues to improve, with 55% of impaired loans covered by impairment allowances 31.4% Commercial, industrial and international trade 18

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