Household unit’s liabilities fall to $70bn for HSBC
HSBC, Europe’s biggest bank, is working off $20bn (£13.9bn) worth of loans per year in its US Household Finance unit as it winds down the business, the bank’s chief executive said yesterday
Household Finance’s liabilities stood at about $70bn, chief executive Michael Geoghegan said in Hong Kong ahead of the bank’s annual shareholder meeting in London on 28 May. The unit’s run-off portfolio, which excludes its credit card arm, was down from $78.9bn in loans and advances at the end of 2009 and $100.4bn at the end of 2008.
HSBC is running down its US consumer finance business after losing billions of dollars as loans soured during the subprime crisis. In the first quarter bad debts fell to their lowest level in more than two years, led by a drop in the US.
HSBC expanded in the US when it acquired Household at the beginning of the credit boom in 2003 for $14.8bn, a deal that allowed the traditionally conservative lender to expand among US subprime borrowers.
As the US economy deteriorated, HSBC pulled back from subprime originating loans, leaving its main focus on corporate and commercial business, private and premier banking, and its credit card business.