Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 297

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 297
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 for ECL which had been reclassified from ‘loans and advances to customers’ to ‘assets held for sale’ in the balance sheet at

31 December 2023. This also included any balances and allowance for ECL which continued to be reported as personal lending in ‘loans and advances to

customers’ that are in accordance with the basis of inclusion for retail sensitivity analysis. This includes the Canada, Argentina businesses and retail banking

operations in France.

At 31 December 2024 , the most significant level of allowance for ECL

sensitivity was observed in the UK, Mexico and Hong Kong. Mortgages

reflected the lowest level of allowance for ECL sensitivity across most

markets given the significant levels of collateral relative to the exposure

values. Credit cards and other unsecured lending across stages 1 and 2

are more sensitive to economic forecasts and therefore reflected the

highest level of allowance for ECL sensitivity during 2024 .

There was a reduction in the total sensitivity for ECL allowance in all

scenarios compared with 31 December 2023, due to banking portfolio

sales, reduction of management judgemental adjustments, model

redevelopments and scenario evolution.

There is limited sensitivity in credit cards and other unsecured lending

in stage 3 as levels of loss on defaulted exposures remain consistent

through various economic conditions. The Downside 2 scenario is

from the tail of the economic distribution where allowance for ECL is

more sensitive based on historical experience and includes a

macroeconomic-dependent stressed LGD for a limited number of

portfolios.

The reported gross carrying amount by stage is representative of the weighted scenario allowance for ECL. The allowance for ECL sensitivity to the other scenarios includes changes in allowance for ECL due to the levels of loss and the migration of additional lending balances in or out of stage 2.

| 190 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

Group ECL sensitivity results

The allowance for ECL of the scenarios and management judgemental

adjustments is highly sensitive to movements in economic forecasts.

Based upon the sensitivity tables presented above, if the Group allowance

for ECL balance was estimated solely on the basis of the Central scenario,

Downside scenario or the Downside 2 scenario at 31 December 2024 , it

would increase/(decrease) as presented in the below table.

| Total Group ECL at 31 December 2024 |         |            |
|                                     | Retail1 | Wholesale