HSBC Subprime Exposure leads to Trouble?
Posted on | January 14, 2009 | 5 Comments
HSBC subprime exposure has caused great pain for this financial company. HSBC, which is Europe’s largest bank based on market value, has reported that they wrote off as much as $11.7 billion in bad loans in 2008; many of these unpaided loans are subprime loans. Almost all write-offs for HSBC are because of the United States HSBC Subprime division of the company.
Recently, it has been learned that HSBC will have to raise $30 billion. Much of this is due to the HSBC Subprime division pulling down the rest of the financial company. After writing off MILLIONS of dollars of the last two years, the remaining divisions of the company are starting to see the effects. When millions of dollars are being flushed down the drain, it is extremely difficult for the rest of the company to remain profitable.
HSBC was the first bank in Europe to report a possible Subprime Crisis in the United States. Since then, worldwide financial institutes have been forced to raise more than $800 billion. The HSBC Subprime division has greatly hindered this company, but at least they have not been forced to be bailed out or even file bankruptcy like several other global subprime financial players.
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January 14th, 2009 @ 10:05 am
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