Major U.S. lender sees trouble from credit card business
While most financial institutions in the U.S. have seen their profits soar in recent months due to consumers doing a better job of paying down their credit card debt, one bank is mulling selling off its lending business.
HSBC could soon sell off its U.S. credit card portfolio because it has largely been underperforming, according to a report from the Buffalo News. Industry experts are now either predicting or outright recommending that the financial institution sell off its credit card business in an effort to drum up capital. Estimates show that doing so could net the company as much as $25 billion that it could put toward other needs.
The company recently released statistics that showed major problems in the first quarter of the new year. Profits have fallen 60 percent on revenues that dipped 14 percent, partly due to dropping credit card balances, the report said.
Most lenders have had the opposite happen in recent months, as improvements in delinquency and charge off statistics have led to markedly higher profits.