HSBC hit by further bad debts
Banking giant HSBC has revealed that losses have soared by $700 million to $4.3 billion (£2.7 billion) in the third quarter due to bad debt charges relating to the US sub-prime mortgage market crisis.
This takes its total impairment since the US housing market crisis first emerged in late 2006 to approximately $23 billion.
Furthermore, the bank added that the turmoil in the financial markets continued to present ‘enormous challenges‘.
HSBC was one of the first banks to highlight the growing repayment difficulties which affected US sub-prime mortgage borrowers. This led to the current financial crisis which is having a devastating affect on some of the world’s largest economies.
However, the bank added that its profit for the third quarter was higher than the same period last year, but didn’t disclose figures.
HSBC also said that repayment arrears were increase on loans extended during 2006 and 2007 and this reflects the weak housing market and rising unemployment and under-employment, particularly in the US states that had experienced the fastest rate of home price appreciation.
According to Michael Geoghegan, group chief executive, the industry is facing extraordinary times.
In early trading today, shares in the bank fell by 1% to 738.5p.