Morgan Stanley cut its price target for HSBC Holdings plc shares traded in Hong Kong to HK$115 each from HK$131 on Thursday. Although HSBC would like everyone to believe U.S. subprime problems will not effect the overall bottom line apparently some analysts liken HSBC’s problems to what happened at Bear Sterns. The move followed a price target cut this week for HSBC’s London-traded shares by a Morgan Stanley analyst in London. Risks appear to be rising for HSBC.
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Democratic Sen. Carl Levin of Michigan, chairman of the subcommittee, said that it seemed “unfair” for credit card issuers to raise customers’ interest rates if they paid their bills on time. He pointed out that other card issuers, such as Chase, have said that they will no longer raise interest rates based on changes to credit scores. He and Sen. Claire McCaskill, a Missouri Democrat, have introduced a bill that would limit the reasons for which credit card providers can raise interest rates.
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How was the subprime crisis facilitated by lack of regulatory action? This report speaks to the situation quite loudly:
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Analysts at Bear Stearns Cos. said HSBC Holdings Plc, Europe’s biggest bank by market value, may post a decline in earnings next year as U.S. loan defaults increase. The bank’s earnings per share next year may fall 13 percent to 141.9 cents, compared with a previous estimate of a 0.6 percent rise to 171 cents, analysts led by Robert Sage in London wrote in a note to clients today. HSBC’s “U.S. subprime problems have significantly deteriorated,” the analysts said.
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As HSBC continues to hemorage red ink in the United States some are asking if HSBC will replace Chairman Stephen Green with CEO Michael Geoghegan. Under pressure from activists at Knight Vinke and others, it appears as though HSBC will make more changes. Some ask if ousting Green will be enough. Unfortunately both individuals inhereted Household International after Sir John Bond and William F. Aldinger III retired from HSBC. Through the guidance of Aldinger and Bond HSBC bought predatory lender Household International, changed the name to HSBC Finance, and continued the operation until HSBC Finance became the biggest subprime lender in the United States.
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We monitor customer trends for possible violations of Regulation Z and other possible illegal actions.
We use your individual HSBC complaints and merchant complaint reports to perform trend analysis.
We are not associated with HSBC, Household International, or their merchants.
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