HSBC Mexico says credit card defaults in control

* HSBC Mexico says credit card defaults manageable

* Bank helps delinquent clients restructure payments

* Executive says reserves exceed requirements

By Noel Randewich

MEXICO CITY, July 9 (Reuters) - HSBC Holdings PLC's (HSBA.L) Mexican bank has defaults in credit card lending under control and is helping clients hurt by a deep recession restructure their monthly payments, a senior bank executive said on Thursday.

HSBC Mexico also has loan loss reserves that exceed the requirements of the country's regulator, Miguel Huller, the bank's head of consumer lending, told reporters.

"Our reserve process is much more exhaustive and conservative than our competitors'," he said. "From the viewpoint of portfolio management, we're very comfortable."

Last week, Moody's Investor Service placed the ratings of HSBC's Mexican unit under review, warning that its credit card portfolio could lead to higher-than-expected losses.

Moody's said it could downgrade HSBC Mexico's bank financial strength rating -- currently "C," considered adequate -- along with other local debt and deposit ratings.

Banks rated "D," the category of ratings below "C," "display modest intrinsic financial strength, potentially requiring some outside support at times," according to Moody's ratings methodology.

Hurt by falling demand for its manufactured exports, Mexico's economy is expected to shrink about 6 percent this year.

More than 500,000 jobs in the formal economy have been lost so far this year, making it difficult for some Mexicans to pay down their credit cards and other debt and boosting delinquencies across the banking industry.

"A lot of clients want to pay but are in difficult situations," Huller said. "For all the clients who are willing to pay, we already have programs to restructure their debt."

Nonperforming loans accounted for almost 17 percent of HSBC Mexico's total credit card debt as of May, according to the country's bank regulator.

In the United States, soaring unemployment drove credit card delinquencies to a record 6.60 percent in the fourth quarter of last year, according to a report this week.

Mexico's banks have not focused on subprime lending and have avoided many problems plaguing financial groups in the United States and Europe.