HSBC admits $51m daily writedown

4 March 2008

HSBC has confessed that writedowns are currently costing it $51 million every day as people fail to pay off their mortgages, credit cards, and other loans.

Yesterday when HSBC announced its annual results for 2007 it admitted writedowns in the sub-prime mortgage department had lost it $11.7 billion.

Writedowns are an increasing problem, with $1.89 billion lost during the first quarter of the year, rising to $2.19 billion in the second quarter.

A further $3.48 billion was written down in the third quarter while HSBC wrote down $4.63 billion during the final quarter.

The number of loans that are more than two months in arrears has also increased over the year from $7.4 billion to $12.5 billion.

Stephen Green, HSBC's chairman, was quoted by the Times as saying: "We're not in a position to say we've turned the corner or passed the worst."

"But the vast majority of people do want to pay their debts back," he said. "People aren't looking for an excuse to hand their keys in and run."

Despite the writedown crisis, an anonymous HSBC director received an annual salary and bonus totalling around $20 million.

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