HSBC Refuses To Speculate On Potential Further Exposure

UK based bank HSBC has today refused to add to speculation that the US sub-branch is set to unveil an additional $1 billion in sub-prime exposure over the course of the week, derived from substantial book asset devaluations over the last quarter.

The US based HSBC Finance division is expected to publish its performance for the the third quarter of the year this week, with much speculation that its increased exposure to the sub-prime sector will be revealed amidst its general liabilities.

The Finance division has already suffered heavily at the hands of the US sub-prime sector, resulting in significant job losses and the closure of a mortgage-specific subsidiary several months ago.

The preliminary results saw the bank lay off over 750 employees, running up a bill of redundancy payments in excess of £450 million, with a view to realising long-term savings.

With the prospect of further losses in this weeks accounts, analysts are forecasting that the division may have to look to further reducing costs in order to return to profitability over the coming periods.

The rumours follow in the wake of similar movements from Barclays bank, which denied reports that it was preparing to announce an additional $10 billion of exposure to sub-prime linked securities.

With the sub-prime mortgage sector collapse of the summer, banks and investment firms worldwide have unveiled logic-defying exposure to bad sub-prime debts, which have left them forced to take heavy write downs, realising significant losses, which has shaken the foundations of the industry.

It remains to be seen whether HSBC will release results similar to those expected by media reports and market analysts, and indeed whether its management will be subject to the same scrutiny as that of other investment banks in recent weeks.

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