HSBC At $600 Million Loss

HSBC, the biggest bank in Europe by its market incurs loss after setting aside $15.3 billion, mainly for consumer loans that soured in the U.S. The first-half net loss approximately will be $600 million, compared with earnings of $7.72 billion last year.

HSBC has disclosed $53 billion of provisions in the last three years, much of which are from the 2003 takeover of U.S. finance company Household International Inc. In March HSBC decided to stop consumer loans. Chief Executive Officer of the company said that the bank’s credit-card unit will face a “difficult” two years because of the economic downturn.

HSBC, in April, increased its capital with $1.78 billion rights as bad debts in the US reserves. The bank said in May it would take a pretax accounting charge of $4.7 billion for the rights offer because most of the shares were denominated in currencies other than U.S. dollars.