MercoPress. South Atlantic News Agency

HSBC writes off U$S 3.2 billion, totaling 15.6 billion

Europe's biggest bank HSBC has written off 3.2 billion US dollars in the first three months of 2008 as a result of its exposure to the US sub-prime market. The write downs, which are lower than the total written off in the final quarter of 2007, are in line with what the bank had predicted.

HSBC now stands behind Citibank, UBS and Merrill Lynch as the banks with the largest value of write downs. It also reported a further 2.6 billion US dollars bn of write downs in its global banking arm. The bank said that profits in the US had fallen but that other markets remained strong. The latest write down takes the amount of bad debt incurred by the bank in the US to almost 15 billion US dollars over the past year. But growth in Asia helped counter the big hit taken on US home loans - meaning profits were still bigger than the same period a year earlier. "I am encouraged by the way we have increased pre-tax profits in every one of the major countries in which we operate in Asia-Pacific, the Middle East and Latin America," said group chief executive, Michael Geoghegan. Private and commercial banking divisions saw record profits in the quarter, he added. The comments as well as the write downs, --being no worse than expected-- helped push HSBC shares up in morning trading. Mr Geoghegan also dismissed speculation that the firm may need to sell off some of its assets, saying he saw "no need to slim down". The main credit losses so far includes: Citigroup, 40.7 billion US dollars; USB, 38 billion; Merrill Lynch, 31.7 billion; HSBC, 15.6 billion; Bank of America, 14.9 billion; Morgan Stanley, 12.6 billion; Royal Bank of Scotland, 12 billion; JP Morgan Chase, 9.7 billion; Washington Mutual, 8.3 billion; Deutsche Bank, 7.5 billion; Wachovia, 7.3 billion; Credit Agricole, 6.6 billion; Credit Suisse, 6.3 billion; Mizuho Financial, 5.5 billion; Bear Sterns, 3.2 billion; Barclays, 3.2 billion.