Household HSBC Watch

In February 2008 Niall Booker became Chief Executive Officer of HSBC Finance Corporation. He will also succeed Brendan McDonagh as Chief Operating Officer of HSBC North America. In March 2007 HSBC Holdings appointed experienced and long-serving banker Niall Booker as chief operating officer, according to a company statement. Is Booker experienced in consumer finance? Is Booker experienced in pay-for-performance and subprime or predatory lending? We think not. A review of HSBC Finance since Booker became involved shows no change in leadership ethics, late application of customer payments, and more big losses from subprime and CDO’s.

Niall Booker’s appointment “represents a safe pair of hands for HSBC” and it was thought that he will be charged with toughening up the bank’s lending business, which has recently suffered as a result of bad debts incurred in the domestic subprime mortgage market. Kudos to HSBC. It only took five years (2003 intil 2008) forHSBC in London to realize they needed to put a Brit in the seat at HSBC USA and HSBC North America. What took so long? Since 2003 everybody who previously held the positions — from Bill Aldinger to Bobby Mehta and Brendan McDonagh was in it for the money, prestige, and power. they told HSBC plc it was a diamond or silk purse when in fact the operation was somewhere between a predaotry lender and a troubled lender.

Booker is making changes including an exit from auto finance. Many HFC and Beneficial Finance offices are closing. It is about time Michael Geoghegan and Niall Booker came to the same conclusion, which is that previous appointees from inside HSBC Finance could not and would not make necessary changes.