Household HSBC Watch

There is a vast difference between true global bankers who once had branches aboard the luxurious Cunard Lines, and the finance company logic of embarassed former predatory lenders. I am old enough to remember true bankers in England, the Cunard Steamship Lines, and such professionalism. I am also old enough to remember when Household International could be trusted, issuing coupon books and giving loans that could be paid back. Branch managers had self esteem, and the company did very well. That was in the late 1950’s and early 1960’s. Today the two do not mesh. HSBC Plc has no business with HSBC Finance. The two are worlds apart.

Bank of England governer Mervyn King issued his own warnings to 350 leaders, including HSBC’s Stephen Green. Mr Green told the conference the banking industry needed to get “back to basics” - focusing on attracting retail deposits instead of excessive borrowing to fund business growth. Is Green showing his intent with regard to HSBC Finance (the former predatory lender Household International)? Will he heed the economic signs and advice from others, disposing of the company? Green also said “This means that sustainable and profitable growth is going to have to come through strategies that get us back to the basic tenets of the banking profession.” We ask, therefore, if Green means the real banking profession or the cut throat strong arm finance business. The two are not even on the same playing field, let alone in the same game.

If HSBC Plc wants to enter the “pawn your title” and “payday loan” business now is the time. One in every 11 homes in America is in some form of foreclosure. Gas prices are so high that people cannot make it to payday. There is a market there, but people are not going to pay those loans back either. At least not until the thugs break a few kneecaps. Come to think of it, that market is not too far removed from HSBC Finance.