HSBC’s reported a sharp rise in US bad debt, mostly due to the worsening performance of its credit card business. Read our complaints and you will see that part of the money HSBC did make from credit cards was questionable at best.
Activist shareholder Knight Vinke, a long-standing thorn in the side of HSBC, is likely to use the figures to press its case for the bank to quit the US altogether. Were payments really late, or did HSBC adopt shady tactics such as “hour of the day posting”?
The true test will be the new credit card holder’s bill of rights. When HSBC is forced to stop shady tactics HSBC will be unable to sustain profits. Combined with econmic problems and unemployment, HSBC will regret giving credit to those who failed to meet requirements of other lenders.
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