Previously HSBC held the top spot in subprime write-downs at approximately $11 billion (USD). HSBC bought predatory lender Household International but blames subprime problems on mortgage brokers. There is always room at the top and now it appears HSBC will be bumped as the number one loser, as Citigroup warned of more writedowns on subprime mortgages on top of more than $6 billion of charges reported for this quarter. How much more? Here is the rest of the story:
Stocks fell in Europe and Asia after Citigroup’s announcement of $11 billion in additional writedowns suggested banks may face more losses. US index futures retreated, and the Dow is down once again on Wednesday. Some analysts suggest HSBC will announce more bad debt and will run a close race with Citigroup for the title of biggest loser. Others suggest that losses in credit card receivables will cause a second wave of pain as consumers are unable to meet their obligations.
HSBC’s credit card business is called HSBC Finance, formerly Household International. HSBC settled allegations of applying credit card payments as late payments, paying $11 million without admitting liability.
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