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Banking, finance, and taxes

HSBC Closes A US Sub-Prime Unit

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By Douglas A. McIntyre Published
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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

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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