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US housing slowdown knocks HSBC US housing slowdown knocks HSBC
(20 minutes later)
Banking group HSBC has warned that its bad debt provisions for 2006 will be 20% higher than expected - largely due to problems in the US housing market. Banking group HSBC has warned that its bad debt provisions for 2006 will be 20% higher than expected - after problems in the US housing market.
Bad debt provisions across the group are now set to be about $10.5bn (£5bn).Bad debt provisions across the group are now set to be about $10.5bn (£5bn).
The slowing growth of the US housing market had led to more people not meeting repayments, HSBC said, increasing its liability.The slowing growth of the US housing market had led to more people not meeting repayments, HSBC said, increasing its liability.
Homeowners had fewer ways of refinancing loans because property prices were not rising, it added.Homeowners had fewer ways of refinancing loans because property prices were not rising, it added.
BBC business editor Robert Peston said that the news was a "warning to others banks to watch out".BBC business editor Robert Peston said that the news was a "warning to others banks to watch out".
However, HSBC said that, aside from its US mortgage business, the rest of its 2006 performance had been in line with expectations.However, HSBC said that, aside from its US mortgage business, the rest of its 2006 performance had been in line with expectations.
In trading in Hong Kong, HSBC shares fell 2.4% .In trading in Hong Kong, HSBC shares fell 2.4% .
"This is something which surprised the market, providing investors with a reason to sell quickly," said Celestial Asia Securities director, Kitty Chan."This is something which surprised the market, providing investors with a reason to sell quickly," said Celestial Asia Securities director, Kitty Chan.