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The Deal That Fueled Subprime
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The 2002 decision for HSBC, a British bank, to buy Household International, which was into subprime lending in the USA, has turned out to be a disaster. Now it will close the 800 offices of Beneficial and Household Financial. HSBC's losses from Household are a big reason for the need to raise $18 billion in new capital. In getting into this business of subprime lending HSBC also sullied its high credit rating and its reputation. In doing so it also added its reputation to make it look like the subprime business was a good one and got it going in a big way. With the securitization process older standards of safety disappeared, as so called financial engineering and its engineers made it believable that inherent risk of a borrower's weak ability to pay could just be reduced or eliminated by packaging it differently and spreading it all around.
HSBC's acquisition of Household International in 2002 and entry into the subprime business that lent its reputation to subprime lending
03/06/2009
The ensuing disaster with the global financial crisis of 2008 and the damage to HSBC's reputation. The need to raise $18 billion in capital stems from poor decisions and business practices such as this acquisition and entry into subprime lending. RBC, HSBC, Barclays the list goes on and on with British banks taking a big hit and legal settlements costing billions.
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Judge Orders HSBC Unit to Pay $2.46 Billion in Subprime Case
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Judge Orders HSBC Unit to Pay $2.46 Billion in Subprime Case
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HSBC Hurt By $1.69 Billion in Legal Costs
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HSBC Hit by Fresh Details of Tax Evasion Claims
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HSBC to Pay Record U.S. Penalty
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Road to Good Returns Gets Longer for HSBC
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HSBC to Sell Brazil Business to Banco Bradesco for $5.2 Billion
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Lloyds Joins U.K. Banks' Overseas Retreat
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HSBC Chops $4 Billion From Costs
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HSBC Plans Up to $3 Billion in Cost Cuts
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HSBC Plans Up to $3 Billion in Cost Cuts
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Wall Street Journal 11/05/2013
HSBCâs Surprise Choice for Chairman Shakes Up Boardroom
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