HSBC Finance will record an impairment charge of about US$880 million, reflecting a write-down of Decision One assets on its books. It also will incur about US$65 million in after-tax charges for restructuring that includes employee termination benefits and facility closuresNEW YORK - HSBC Holdings, Europe's biggest bank, said on Friday that it would close its US sub-prime mortgage unit, cutting 750 jobs and taking US$945 million in charges and write-downs, because the business is no longer sustainable.
For London-based HSBC, which is under pressure from activist investors to shake up its corporate governance, it was the latest blow from the meltdown in the US market for loans to home buyers with poor credit histories.
HSBC Finance, the US consumer finance arm of HSBC, said the closure of Decision One Mortgage would result in people losing their jobs at offices in Fort Mill, South Carolina, Phoenix, Arizona and Charlotte, North Carolina.
'It's no longer sustainable and not the right place to allocate capital in the future,' HSBC Holdings Group chief executive Michael Geoghegan said in a statement.
HSBC Finance will record an impairment charge of about US$880 million, reflecting a write-down of Decision One assets on its books. It also will incur about US$65 million in after-tax charges for restructuring that includes employee termination benefits and facility closures.
HSBC acquired Decision One when it bought Household International in 2003 for US$14 billion. Decision One is a small part of HSBC's US operations, which include auto lending and credit cards. -- REUTERS
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