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.