HSBC Finance runoff down to 70 Billion
Reuters is reporting that Household Finance Corp’s liabilities stood at about $70 billion, Chief Executive Michael Geoghegan said in Hong Kong on Monday ahead of the bank’s annual shareholders’ meeting in London on May 28.
The unit’s run-off portfolio, which excludes its credit cards arm, was down from $78.9 billion in loans and advances at the end of 2009 and $100.4 billion at the end of 2008.
HSBC is running down its U.S. consumer finance business after losing billions of dollars as loans soured during the sub-prime housing crisis.
Earlier this month, the bank said that in the first quarter bad debts fell to their lowest level in more than two years, led by a drop in the United States.
HSBC expanded in the United States when it acquired Household Finance Corp at the beginning of the credit boom in 2003 for $14.8 billion, a deal that allowed the traditionally conservative lender to expand among U.S. subprime borrowers.
As the U.S. economy deteriorated from 2006, HSBC began to pull back from U.S. subprime borrowers and stopped originating home loans and auto financing.
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