HSBC hit by US mortgage crisis
British banking group HSBC today revealed an extra $1.4bn (€950m) has been hit in its American mortgage business as it continues to suffer from the country’s sub-prime lending crisis.
The charge follows last year’s $10.6bn (€7.2bn) bad debt exposure, which led to the first profits warnings in HSBC’s history.
HSBC warned today that America’s sub-prime mortgage default crisis – involving borrowers with a bad credit history – could deepen and said further volatility as a result of the credit crunch was “more than a remote possibility”.
The group said it is shutting another 260 branches in its embattled US consumer finance division as it seeks to offset the losses.
It has already closed and merged 100 branches in the operation and has axed 750 jobs in its US mortgage business.
