HSBC writes off $3.4 million over US losses

Source: Exec Digital UK

Date :14/11/2007 17:08:18

HSBC Holdings on Wednesday said it would have to write off a further $3.4 billion from during the third quarter because of losses at its HSBC Finance Corp. mortgage business in the United States.

The write-off is $1.4 billion more than expected based on first-half trends.

Of this increase, about $700 million of the write-off at the former Household International is related to real estate secured credit, with the remainder largely due to branch unsecured loan and cards portfolios.

HSBC bought Household in 2003 for around $14 billion.

Market volitality

HSBC warned that the subprime crisis could deepen and said further volatility as a result of the credit crunch was "more than a remote possibility"

"There is the probability of further deterioration if the current housing market distress continues and further impacts the broader economy," the company said.

The lender said pre-tax profit will increase as the excellent operating and financial performance delivered in the first half continued in the third quarter. Europe was strongly ahead of the prior year quarter.

Latin America was lower as a result of higher loan impairment charges in Mexico, HSBC said.

November 14, 2007