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HSBC 'to reveal more US bad debt'

Business Materials 12 November 2007 01:09 (UTC +04:00)

UK banking giant HSBC has declined to comment on speculation its US unit will this week reveal a further $1bn (?478m) exposure to bad American housing debt.

HSBC Finance will show the losses when it releases results on Wednesday for the three months to the end of September, said the Sunday Telegraph.

The unit has already cut 750 jobs at a cost of $945m (?452m) due to the crisis in the US sub-prime mortgage sector.

The job losses came as it shut down one of its sub-prime mortgage subsidiaries.

That announcement was made back in September.

Sub-prime mortgages are higher risk home loans to people with poor credit histories, or those on low incomes.

The sector has experienced record loan defaults against a backdrop of higher US mortgage rates over the past year.

The knock-on effect has been large losses for many of America's biggest banks, who found themselves heavily exposed to the industry.

Two of the largest - Citigroup and Merrill Lynch - have both seen their former bosses resign as a result.

HSBC's fellow UK bank Barclays denied on Friday that it was about to reveal a $10bn exposure to US mortgage bad debt. ( BBC )

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