LONDON Nov 7 HSBC is nearing the sale
of more than $6 billion of U.S. mortgages and other personal
lending as part of its accelerated run-down of its troubled
U.S. loans book.
HSBC this week said in its quarterly results it had moved
$3.7 billion of unsecured personal loans in the United States to
its "assets held for sale."
In addition, HSBC's North American results showed it had a
$3.2 billion portfolio of real estate loans as "held for sale"
to a "third party investor".
HSBC, Europe's biggest bank, continues to deal with the
legacy of a disastrous U.S. foray in 2003 when it bought
Household International for $15 billion.
Years of aggressive lending followed that deal, leaving HSBC
as one of the biggest sub-prime lenders when the U.S. housing
market crashed and saddling it with losses of tens of billions
When the scale of the crisis became clear HSBC shut its U.S.
consumer loans business and has been running down the book.
The portfolio, mostly real estate, stood at $44.2 billion at
the end of September, down $7 billion in the last year and less
than half its $101 billion total in 2008 but still big enough to
potentially take a decade to run off.
Stuart Gulliver, who took over as HSBC chief executive at
the start of 2011, wants to accelerate the rundown of the
The bank has said buyers had this year started showing
interest in portfolios at prices it would consider, and
BlackRock had worked on valuing assets.
Bad debt losses from the run-off book have been falling
steadily, although a spike in impairments a year ago hit HSBC's
share price and prompted Gulliver to look harder at speeding up
The unsecured and real estate portfolios could be sold in
the first quarter of next year, a person familiar with the
HSBC declined to comment on whether buyers are lined up.
It has not provided details on the portfolios, although it
said earlier in the year investors had shown interest in
specific regions, citing property in Nevada or Florida.
Under Gulliver the U.S. business will focus more on
commercial banking and investment banking, shifting away from
retail customers. HSBC last year sold its U.S. credit card
business and 195 branches, about half its network.
It is likely to leave the U.S. business looking more like
HSBC in Canada, which made $602 million in the first half of
this year, including $307 million from commercial banking and
$174 million from investment banking.
But it may face a hostile regulator in the United States
after being slammed for lax anti-money laundering compliance in
HSBC this week said it faces a U.S. fine of "significantly"
more than $1.5 billion and criminal charges, which could hinder
its activities there.