HSBC closes US sub-prime division
( BBC ) - Banking giant HSBC is to close part of its US sub-prime mortgage business, cutting 750 jobs in the process.
US subsidiary HSBC Finance is shutting its Decision One unit at a cost of $945m (?468m), as it becomes the latest firm hit by the crisis in the sector. Despite the move, HSBC said it would continue to offer some sub-prime mortgages through its US branches.
Back in February, HSBC was one of the first lenders to warn of rising default levels in the US sub-prime sector.
The 750 job losses will be spread across Decision One's two offices in Phoenix, Arizona, and Charlotte, North Carolina.
"It's no longer sustainable and not the right place to allocate capital in the future," said HSBC chief executive Michael Geoghegan.
"We said we would make tough decisions and we have done exactly that."
In March HSBC stopped buying mortgage loans from other financial bodies to reduce its exposure to potential defaults.