$1 billion write down expected from HSBC

12 November 2007

HSBC is expected to announce another huge write down of over $1 billion on its portfolio of high-risk sub-prime mortgages in the US.

On Wednesday the bank is set to unveil its third-quarter results for the US and the announcement will fuel concerns that the turmoil in the credit crisis is not over.

The bank has already closed its Division One sub-prime lending operation, and has ceased to buy high-risk home loans from other lenders.

According to City AM, HSBC has refused to deny the claims and the figure could be higher as losses from the run-off of the US mortgage book were about $2 billion in the second quarter.

The news follows reports that Barclays is due to bring forward its trading statement from November 27th to stop rumours about its exposure to the sub-prime turmoil.

Shares in Barclays were temporarily suspended when they plummeted nine per cent on the London Stock Exchange on Friday.

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