HSBC executive resigns on US bad debts

HSBC executive resigns on US bad debts
Thursday, 22 February 2007 16:33
HSBC, one of the world’s largest banks, said today that the head of its US banking operations had resigned, days after the bank warned it faced a liability of over $10 billion on risky mortgage lending.

An HSBC spokesman in New York said the banking group had yet to announce a new CEO for its sprawling US business, which includes banking services, mortgages, credit cards and consumer loans.

The bank told investors on February 8 that it was setting aside about $10.5 billion due to its exposure to ‘subprime’ mortgages extended to customers with poor credit records.

AdvertisementHSBC blamed the cost spike on a slowdown in the US housing market, which has seen repossessions spiral as some homeowners struggle to keep up with their mortgage repayments.

The chaps in London needed a sacrificial lamb to through to the wolves. HSBC were targeting the Irish sub prime market, I wonder if their plans will change in light of the sub prime debacle in the US.