Household HSBC Watch

It is Saturday night in the United States but Sunday in England and Sunday papers have been printed. It’s also one day closer in London until the day HSBC releases new numbers. London is bracing itself for more bad news on bad debts from HSBC when it announces its half-year results tomorrow, amid fears that the crisis in sub-prime lending in the US has spread to other parts of its loan portfolio.

Antony Broadbent, banking analyst at Sanford Bernstein, expects the bank to warn that there has been an increase in bad debts in its unsecured lending book. He is forecasting provisions against its US personal financial services business of $3.3bn (£1.6bn) in the first half of the year. While that is lower than the $4.6bn charge in the second half of 2006, that figure included a $1.8bn exceptional write-off against sub-prime loans to borrowers with poor credit records. Excluding that, his forecast implies a 17 per cent increase in provisions for the division.