Alex Hungate said: “I want to help HSBC grow by maintaining a relentless focus on the needs of its customers. In this role, with its combination of global leadership of the Personal Financial Services business plus the marketing function, I want to ensure that our services always deliver on the powerful promise of the HSBC brand.”
Recent problems in the subprime sector spread around the world very quickly. Then the problems spread to Alt-A mortgages. Cash strapped borrowers with second mortgages and adjustable rate mortgages caught the attention of the world. By the morning of August 9, 2007, something else caught the attention of investors around the world. Questioning whether people can pay their credit card bills, investors are looking at asset-backed securities. Reports from Household – HSBC Watch show an alarming pattern. Unwarranted late fees, slow payment processing, and customer complaints beg investors to ask if HSBC Finance Corporation is artificially covering losses in asset-backed securities.
The Cerberus private equity group recently bought Chrysler. Cerberus already owned 51 percent of GMAC. Chrysler Financial is the only part of Chrysler that makes money. The handwriting is on the wall for Cerberus to strip and flip Chrysler, keeping the profitable finance portion. HSBC Finance Corporation may look attractive to Cerberus at this point because subprime losses drove down the net value of the consumer finance division. Look for Cerberus to make a move that would also strip and flip parts of HSBC Finance consumer lending that would be redundant or unprofitable.
Here is an article that caught our eye, given the number of self-seve self-centered articles we already see about HSBC. Are you sick and tired of PR Newswire articles, half of which are actually self-serving advertising generated by HSBC North America and HSBC Finance Corporation?
HSBC bought subprime loans from troubled lender Accredited Home Lenders, but stopped buying subprime loans in April 2007. (sidenote: Bobby Mehta stepped down as chief executive of HSBC Finance Corp. and as head of HSBC North America on February 15, 2007.)