HSBC warned today that the subprime meltdown is spreading into credit cards and other types of consumer loans, says the NYT. The bank announced that it will be taking a larger write down than it forecast, due to the spreading delinquencies.
“We are seeing a re-evaluation of asset classes in U.S. real estate and this is going to continue,” HSBC’s chief executive, Michael Geoghegan, said on a conference call with analysts. “We’re not through the credit crisis yet.”
“Early stage delinquency rates in both cards and branch unsecured lending are also showing signs of deterioration,” HSBC said in a statement.
The bank will now be setting aside $3.4 billion to cover bad loans.