HSBC Posts Gain on Questionable Accounting?
To be filed under Chinese Cook Books... HSBC's subprime losses started after the 142-year-old bank paid
$15.5 billion for Household International Inc. in 2003, becoming one of the largest U.S. subprime lenders.
Today, HSBC, said Q1 profit increased as it set aside $3.2 billion to cover bad loans in the U.S.
Europe's biggest bank by market value, cut 2,000 jobs in Q1 to manage declining earnings in the U.S.
Payments on 5% of mortgages at HSBC Finance branches were overdue by two months or more at the end of March, up from 4.2% in December.
HSBC wrote down $2.6 billion on investments, posted $2.9 billion in credit loss provisions and benefited from a $1.2 billion accounting gain on its own debt.
HSBC Finance Corp., the former Household unit, said Q1 net income fell 53%.
Pretax profit was $452 million, better than the $1.8 billion loss estimated by analysts at Credit Suisse Group.
Also, three analysts surveyed by Bloomberg predicted the Q1 loan loss would range from $4.2 billion to $4.8 billion in the U.S. consumer-finance unit.
Knight Vinke Asset Management LLC, holds less than 1% of HSBC's shares:
The cumulative writedown for subprime and related losses would be $50 billion had HSBC's accounting "been as conservative as other banks."
Hattip to Bloomberg.
$15.5 billion for Household International Inc. in 2003, becoming one of the largest U.S. subprime lenders.
Today, HSBC, said Q1 profit increased as it set aside $3.2 billion to cover bad loans in the U.S.
Europe's biggest bank by market value, cut 2,000 jobs in Q1 to manage declining earnings in the U.S.
Payments on 5% of mortgages at HSBC Finance branches were overdue by two months or more at the end of March, up from 4.2% in December.
HSBC wrote down $2.6 billion on investments, posted $2.9 billion in credit loss provisions and benefited from a $1.2 billion accounting gain on its own debt.
HSBC Finance Corp., the former Household unit, said Q1 net income fell 53%.
Pretax profit was $452 million, better than the $1.8 billion loss estimated by analysts at Credit Suisse Group.
Also, three analysts surveyed by Bloomberg predicted the Q1 loan loss would range from $4.2 billion to $4.8 billion in the U.S. consumer-finance unit.
Knight Vinke Asset Management LLC, holds less than 1% of HSBC's shares:
The cumulative writedown for subprime and related losses would be $50 billion had HSBC's accounting "been as conservative as other banks."
Hattip to Bloomberg.
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