HSBC Holdings Plc plans to sell two portfolios of consumer loans in the U.S. for $3.2 billion in cash as part of a strategy to trim its U.S. operations.
HSBC, Europe's largest bank, said on Tuesday that its HSBC Finance Corporation (HFC) division is selling its personal unsecured loan and personal homeowner loan portfolios to Springleaf Finance Inc and Newcastle Investment Corp. The assets were valued by HSBC at an estimated $3.4 billion at the end of 2012.
The bank has been seeking to sell more than $6 billion worth of U.S. mortgages and other personal loans as part of an accelerated rundown of its troubled U.S. loans book. The bank is still dealing with the legacy of a problematic U.S. venture in 2003 after it bought Household International for $15 billion.
Years of aggressive lending followed that deal, leaving HSBC as one of the biggest subprime lenders when the U.S. housing market crashes. The bank was saddled with losses of tens of billions of dollars.
HSBC has sold or otherwise exited 47 businesses since CEO Stuart Gulliver took command in early 2011, including the recent profitable sales of its $7.4 billion stake in Chinese insurer Ping An and its $2.1 billion Panama business. Gulliver has said a more streamlined structure is needed for the bank to better manage risk and compliance across its networ, which spans more than 80 countries and 60 million customers.