We knew HSBC put a Brit in charge of HSBC Finance. This is what he had to say today:
During a conference call with reporters, Niall Booker, chief executive of HSBC Finance Corp., said subprime lending as a stand-alone operation is a failed business model, and the purchase of Household International Inc. was “not successful.”
Asked whether HSBC might have been able to change its consumer finance business to make other types of loans, Booker said: “We looked at that as an option,” but “you still have the wholesale funding issue and…you still face [ a] fairly high level of delinquencies.”...
Moreover, “the real problem was the volume of business that was required to justify the infrastructure,” Booker said. “In the end, subprime financing, whether it be mortgage based or unsecured, hasn’t got much connection with much of the rest of the group.”
What is the status at Citigroup subsidiary CitiFinancial, or Wells Fargo subsidiary Wells Fargo Financial?
Citi Holdings, a unit Citi created to combine business units it considers not core to its main operations, includes CitiFinancial, its own consumer finance unit with more than 2,000 branches nationwide. The bank has said CitiFinancial customers are separate from its deposit business. It is unlikely to grow it, but executives said options include selling CitiFinancial or seeking a joint venture.
Wells Fargo did not comment.