Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

HSBC coughs up US$1.58bn to settle Household legacy

HSBC Finance will take a pre-tax charge of US$585mln in the second quarter of this year.
PIcture of HSBC office
Household has been a running sore for HSBC

HSBC (LON:HSBA) has agreed to pay out US$1.58bn to settle a dispute related to its disastrous 2003 acquisition of subprime lender Household International.

A settlement with the group of US plaintiffs in a class action was agreed ahead of a second trial due to start yesterday.

HSBC had disclosed a possible exposure of up to US$3.6bn for the case, which related to events prior to Household's acquisition by the UK bank.

A trial in 2009 had awarded US$2.5bn to the plaintiffs but though a court of appeal upheld that judgement it wanted a new trial to look at loss causation and damages.

As a result of the settlement, the bank said its HSBC Finance arm would take a pre-tax charge of US$585mln in the second quarter of this year.

HSBC bought Household for US$14bn in what was one of its worst deals ever with billions being lost in impairments, bad debts and fines.

The case stemmed from a settlemtn by Household in a case that accused it of predatory lending and deceiving customers into paying exorbitant rate of interest.

View full HSBA profile View Profile

HSBC Timeline

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use