HSBC won't cave to subprime
Despite billions in write-offs and problems with U.S. subprime loans, HSBC, Europe's largest bank, is still managing to make money. Stephen Beard explores why the bank's profits are up in the third quarter.
An HSBC bank branch (Getty Images)
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Doug Krizner: Europe's largest bank is writing off billions more to cover bad loans made in the U.S. Even so, HSBC is making money, as Stephen Beard reports from London.
Stephen Beard: HSBC's overall profits are up in the third quarter, thanks to its Asian and Latin American operations. But business is still bad in the U.S. The bank has had to write off another $3.4 billion for U.S. mortgages and personal loans that have gone sour. HSBC is one of the largest subprime lenders in the U.S.
Maggie Urry, Consumer Finance reporter for the Financial Times, says these American results are worse than expected and slightly ominous:
Maggie Urry: The mortgage market is getting worse and is likely to be weak for longer than they'd previously expected. And that could affect the whole U.S. economy and even tip it into recession.
HSBC was the first major bank to report problems in the U.S. mortgage market a year ago. Its shares, however, rose this morning on the view its buoyant emerging market business will outweigh its difficulties in America.
In London, this is Stephen Beard for Marketplace.
