HSBC hit by US Mortgage Crisis costing $4.3 billion

HSBC announced today that due to its US financial arm it has recorded write-offs of $4.3 billion (£2.7 billion). The bank has lost $38 billion on bad loans since 2006, However in the third quarter HSBC’s overall profits were up from the same time a year ago, but pre-tax profits for the year so far were down.

As the recession takes control in several mature economies HSBC have warned that the economic growth will undoubtedly slow as we head into the next few quarters.

In an interim statement HSBC said: “The unprecedented turbulence seen in financial markets continues to present enormous challenges for the financial sector as whole, as an increasing range of asset classes experience illiquidity and extreme price volatility”.

HSBC group chief executive Michael Geoghegan warned of further deterioration in the near to medium term” in the United States.

HSBC in the UK have said the banks revenues remain “resilient” this was in a response to its RateMatcher campaign that it launched in the first 6 months of 2008.

Figures of loan impaired charges in Britain were a lot higher than the three months leading to the end of September which suggests that more homeowners are struggling with their mortgages.

Source: Debt1