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HSBC to shut-down US mortgage arm

Banking giant HSBC has closed its mortgage-backed securities trading department in the US in an effort to cut costs.

The bank will slash about 120 jobs in moves to cut down on costs and it follows the move to close Decision One, a sub-prime mortgage arm.

Shutting down the shop is set to cost the UK bank about $150 million, according to the New York Post, a much smaller figure than the one suffered by Normura Securities who were forced to pay $621 million when closing a mortgage desk last month.

HSBC is looking to invest in emerging markets and this direction has led the bank to cut down on its existing operations.

Analysts predict that other banks will follow their example and Deutsche Bank and UBS are being touted as the next potential firms to reduce the size of their mortgage and trading departments.