HSBC’s consumer finance division will require further capital injections for several years, the bank admitted Monday, as it revealed the business had destroyed about $10bn in shareholder value since it was bought six years ago. HSBC said it would withdraw from the US consumer loan market, closing 800 branches of HSBC Finance Corp, bought in 2003 for $15bn in stock. As HSBC launched a £12.5bn rights issue and slashed its dividend, Michael Geoghegan, chief executive, said the bank regretted the investment. While HSBC reported pre-tax profits of $9.3bn for 2008 – despite writing off $10.5bn in goodwill on its US consumer finance operations – profits were less than half those of 2007.

This entry was posted by Gwen Robinson on Tuesday, March 3rd, 2009 at 4:56 and is filed under Capital markets. Tagged with hsbc. Edit this entry.