HSBC Bermuda is seeing a growing number of clients who have signed their paperwork and are ready to borrow, but are waiting before they buy a property.

The revelation came during an interview with the bank’s top executives after they released their financial results yesterday afternoon.

“We are seeing the pipeline has really increase on mortgages,” HSBC Bermuda CEO Richard Moseley told The Royal Gazette. “These are people who have applied and have been accepted and they’re ready to buy.

“Given the surplus supply, you’d think they’d be able to move quickly. But I think they’re adopting a ‘wait and see’ approach and they’re quite specific about what they want and they’re also looking for more ‘green shoots’ to indicate the bottom is there.

“People are beginning to nibble. I think the challenge for the economy is, how does the Government manage its overall level of indebtedness without taking away the nascent recovery?”

On his view of the local economy, he said “things are getting no worse” and there were positive signs in the rising number of company formations, particularly insurance-linked securities (ILS). Although ILS would have limited impact in producing jobs, he said it added to Bermuda’s strength as the leading international re/insurance centre.

The bank’s chief financial officer Michael Schrum said: “On the lending side, we are seeing a tremendous amount of interest. There’s still quite a bit of uncertainty out there about where values are going to end up. So we’ve had about the same number of transactions as we saw last year, but the interest has grown.”

The bank’s net profit more than doubled to $45 million in 2013, as it cut expenses and withstood significant allowances for bad loans.

The bank, part of the HSBC global empire, revealed its Bermuda unit’s results yesterday and stressed that it had helped “a large number of customers” to restructure loans during the year.

Operating revenue rose $7 million, or three percent, to $242 million, while the bank cut expenses by $6 million, or three percent, to $206 million.

Total loans and advances to customers declined 16 percent year over year to $3.09 billion. Mr Schrum said the bulk of that reduction involved overseas loans.

The difficulties of borrowers in the tough economic environment were evident in the bank’s numbers, as impairment allowances increased to seven percent of gross loans, compared to four percent in 2012.

But the news that qualified borrowers are waiting in the wings may signal better times ahead.

“The impairment allowances were required as a prudent response to continuing stress in both the local and international real estate markets, reflecting lower values for both commercial and residential property and higher delinquency levels,” Mr Schrum said in yesterday’s statement.

The bank’s total assets of $14.17 billion at December 31, 2013, were up seven percent from a year earlier. The total capital adequacy ratio, a measure of financial stability, was 20 percent, comfortably exceeding regulatory requirements.

Mr Moseley said all employees could take pride in the bank’s response to challenging times for its whole customer base, from residential to corporate clients.

“Locally, we have spent much time with many individuals and businesses to help our customers manage through difficult times,” Mr Moseley said. “Indeed we have made it a key priority to assist a large number of customers to restructure their financial obligations through traditional means, such as debt consolidation, as well as innovative solutions helped by our ability to leverage the broad skill base of the wider HSBC Group.”

Mr Moseley stressed that the HSBC Group’s local network had enabled it to provide new ways to help its international business customers on the Island.

“The Bank was selected in lead management roles for a number of capital markets transactions, and we continue to assist our insurance clients with management of their cash flow and non-US dollar catastrophe claims by providing value added foreign exchange content and foreign currency accounts.

“We have undertaken a number of Chinese renminbi on/offshore foreign exchange transactions. We also provided significant local financing for our larger local clients.”

Developments in HSBC’s personal banking included “principal protected” investments, additional insurance products, and being the first bank in Bermuda to introduce a mobile banking application as well as additional internet banking security measures.

Uptake of the mobile app, which was launched last September and which allows customers to do their banking through a mobile device like a smart phone or a tablet, has been strong. Around five percent of logons are now through the mobile app, Mr Schrum said.

The bank noted it had seen “a significant inflow of additional funds” into its Private Banking Investment Management business.

Mr Moseley stressed the bank had put much time, effort and money into the community.

“In 2013, HSBC provided over three quarters of a million dollars in sponsorships and donations, supporting many community initiatives and events,” the CEO said. “HSBC also supports volunteering in the community through the HSBC Staff Volunteer Community Action Day Programme which was launched in 2006 and, since its inception, HSBC staff have volunteered nearly 8,000 hours to helping the community.

“The bank has made diversity a major theme, organising many events and recognising the value that diversity brings to us as an organisation and the diverse nature of our customers.

“I would like to personally thank our customers for their continued support and confidence in the bank and our staff for their commitment and support to our customers during this difficult period.”