Bank of America finalized the purchase of MBNA, leaving HSBC far behind in the U.S. credit card market. Analysts say it’s possible that HSBC’s ‘Household International’ purchase came with such a bad reputation for predatory lending that HSBC will never catch up. Even with their pending deal to buy scandal plagued Metris, reputational risks will be expensive for HSBC. “It is certain that HSBC’s ‘Household Model’ will be exported to other countries, while a little intelligent thinking could have achieved a better return for HSBC than Household International did” said one analyst.
According to consumer advocate and watchdog organization Household - HSBC Watch, HSBC could eliminate stained and scandal ridden Household, HFC, and Beneficial brands, being better off operating under the Metris name. “We won’t let Americans forget, no matter what name HSBC uses” said the group.
Bank of America’s share of the U.S. credit card market jumps from 8.6 percent to 20.3 percent, according to statistics from the Nilson Report, a credit card industry newsletter. That market share puts it slightly ahead of the previous No. 1 issuer, JPMorgan Chase & Co., another megabank with its credit card unit based in Wilmington. Chase’s market share is 19.1 percent.
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