Thursday, February 08, 2007

surprise, surprise....HSBC to Boost Loan-Loss Provisions on Bad Mortgages

what a surprise........ just look at mortgage implode meter and you can see on a daily basis that the party is over. or read more at the label on the bottom of the post

was ne überraschung..... braucht euch die verlinkte seit oben anzusehen um zu erkennen das die party vorbei ist.......oder unter den labeln

Feb. 8 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, said it's setting aside 20 percent more than analysts estimated for loan losses in 2006 because the company's U.S. mortgage business is deteriorating.

Home loans to risky borrowers in the U.S. are going bad faster than HSBC expected just two months ago.....

HSBC's $15.5 billion purchase of Household International Inc. in 2003, which initially helped it boost profit as U.S. house prices soared, is now eroding earnings as defaults jump. Home loans to borrowers with poor credit ratings or large debt burdens are defaulting at a faster rate than during the U.S. recession six years ago.....

HSBC said analysts had expected $8.8 billion in loan-loss provisions for 2006, based on the average of 11 estimates gathered by the bank. A 20 percent increase would bring provisions to $10.56 billion, more than the $8.7 billion HSBC earned in the first half.

Sub-Prime Rates
The stock has fallen 7.2 percent since Nov. 13, when HSBC first said bad debts in the U.S. were rising, making it the third- worst performer on Hong Kong's benchmark Hang Seng Index. All other banking stocks on the index rose in the period. ...... isn´t ironic that countrwide and wells fargo have outperformed the well diversified hsbc with business all over the world. cfc and wfc are only focussed in the us and on top of that mainly in the mortgage business................komisch das hsbc schlchter als countrywide und wells fargo abgeschnitten haben die im gegensatz zu hsbc nur in den usa tätig sind............

New Century, HSBC's largest competitor for so-called sub-prime mortgages, said yesterday it expects a fourth-quarter loss in part because of a jump in defaults on new loans. here is the shocking reality on new century (i think a must read)

`Further Weakness'
``The impact of slowing house price growth is being reflected in accelerated delinquency trends across the U.S. sub-prime mortgage market,'' HSBC said in the statement. ``It is clear that the level of loan-impairment provisions to be accounted for as at the end of 2006 in respect of Mortgage Services operations will be higher than is reflected in current market estimates.''

Mortgage Bankruptcies
Irvine, California-based New Century also is restating earnings for the first nine months of 2006 and delaying the release of fourth-quarter results.

disclosure: short cfc, new

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Anonymous loan said...

Nice surprise, to boost loan-loss provisions on bad mortgages post! Thanks for intesting info!

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