By JONATHAN D. EPSTEIN
News Business Reporter
11/16/2005
Profits at the New York-based parent of HSBC Bank USA fell again in the third quarter, as the growing relationship between HSBC Bank USA and former consumer finance company Household International continues to take a toll on the local bank’s earnings.
HSBC USA reported net income of $252 million, down 25.7 percent from $339 million in the same quarter a year ago, according to a document filed with the Securities and Exchange Commission. Profits for the first nine months of the year similarly fell 21 percent to $780 million from $989 million.
The cause was continued transfers of credit card and consumer loans from Illinois-based Household, now called HSBC Finance Corp., to the bank, which can support the loans more cheaply and hold them on its books. That grows the bank’s loans and net interest income.
But the bank had to set aside more than seven times as much for possible loan losses in the $14 billion credit card portfolio, including some impact from the rush of personal bankruptcy filings prior to new bankruptcy legislation taking effect in October. The bank also has had to spread out the hefty price it paid to buy the loans across several quarters, including $180 million in this quarter.
Related posts:
