HSBC writes off $4.3bn from US mortgage losses

Monday 10th November 2008

HSBC today recorded write-offs of $4.3 billion (£2.7 billion) from its US finance arm.

Since 2006 the bank has posted losses of $38 billion on bad loans.

Overall profits over the third quarter were up on a year ago for HSBC, but pre-tax profits for the year so far were down.

HSBC warned: "Without doubt, global economic growth will continue to slow during the next few quarters as recession takes hold in several mature economies."

The bank's interim statement added: "The unprecedented turbulence seen in financial markets continues to present enormous challenges for the financial sector as a whole, as an increasing range of asset classes experience illiquidity and extreme price volatility."

Michael Geoghegan, HSBC group chief executive, also warned of "further deterioration in the near to medium term" from the US.

He added: "These are extraordinary times in our industry."

In the UK, the firm said revenues remained "resilient" – in part in response to its RateMatcher campaign in the first half of 2008.

Loan impairment charges in the UK were higher in the last three months to the end of September, but, for the nine months ended September 30th 2008, were lower – suggesting an acceleration in the number of people struggling with their mortgages.

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