HSBC USA, the immediate legal parent of HSBC Bank USA, said fourth-quarter profits fell 27 percent, driven entirely by the accounting costs of transferring credit card loans and customers with an affiliate company. The bank reported earnings of $196 million, down from $269 million a year ago. For the year, profits similarly fell 22 percent to $976 million from $1.26 billion for the same reasons.
For all of 2005, the bank deducted $451 million before taxes for the 2004 purchase of a $12 billion private-label consumer loan portfolio - mostly credit cards - from Illinois-based HSBC Finance. In 2004, the bank recorded a gain of $99 million from selling its own credit card customer relationships to HSBC Finance, which services those customers. Operating expenses rose 31 percent to $2.76 billion, led by payments for support services from HSBC Finance and other HSBC affiliates.
HSBC Finance is the name for Household International, famous for predatory lending, said advocates at Household - HSBC Watch.
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