US mortgage defaults weigh on HSBC profits
AFP, March, 2007
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LONDON (AFP) — Global banking giant HSBC Holdings announced a a 35.5-percent surge in bad debts during 2006 owing to increased defaults on home loans by high-risk US borrowers.
HSBC, the world's third-biggest bank, said that total impairment charges, or loans to customers that were written off, rose to 10.573 billion dollars (8.052 billion euros) last year.
That dented net profit growth in 2006, which rose just 4.7 percent to 15.789 billion dollars year-on-year, compared with growth of 17.0 percent in 2005.
The price of shares in HSBC rose in London because weak results had been expected by the market and investors cheered an 11-percent increase to the bank's full-year dividend, dealers said.
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"The major credit issue affecting the group in 2006 arose in the US," HSBC said in its earnings statement.
It added that ...
