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HSBC Says U.S. Housing Decline to Last for Another Year
Published: May 12, 2008
London--London-based bank HSBC--one of the first to be affected by the subprime mortgage market collapse--said Monday that the U.S. housing slump could continue through 2009, the Financial Times reports.
”We don’t think this is a 2008 event, it’s a 2009 event,” said Chief Executive Michael Geoghegan.
HSBC also announced it had earmarked $5.8 billion because of first-quarter credit issues and had set aside $3.2 billion in bad debt provisions--twice the amount it had set aside in the first quarter of 2007.
Half of the provision involved mortgages; the rest was related to the bank's rising credit card and car loan defaults.
Because HSBC lends heavily to U.S. customers with weak credit histories, other banks consider its results highly indicative of market improvements or issues, the Times said.
