…While HSBC sees curb on cov-lite loans

The chairman of HSBC on Monday said turmoil in the credit markets could blow away some of the “froth” in the market, with “cov-lite” loans set to be curtailed, as the bank revealed record provisions for bad debts linked to the US subprime crisis. Stephen Green said: “It is too early to tell if this is a temporary bout of indigestion or whether a whole new pricing structure” is establishing itself. HSBC announced a 13 per cent rise in first-half profits to $14.1bn, lifted by a $1bn exceptional gain, although problems in US subprime mortgage lending caused a 20 per cent profit fall at its personal financial services division.

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