HSBC (HBC), the largest bank in Europe, said HSBC Finance would close Decision One Mortgage. According to Reuters the company will be "cutting 750 jobs and taking an $880 million writedown, because the business is no longer sustainable."
HSBC Finance has closed two of its three channels for subprime mortgage lending. Reuters reports that the company will continue to originate subprime loans through its network of more than 1,350 branches.
The move may have two consequences over the near-term. The first is that the number of large sub-prime lenders is beginning to drop. The may end up being good for market leader Countrywide (CFC), which appears to be recovering from its recent trouble.
The other by-product of the decision is that HSBC is probably much less likely to buy another bank in the US to improve its market share here.
HSBC has been pressured by activist investors to improve returns. The retreat from the US market may also be a sign that the agitation is having an effect.
Douglas A. McIntyre
Cash Back Credit Cards Have Never Been This Good
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
