Sub-prime woes played down

PUBLISHED : Saturday, 24 March, 2007, 12:00am
UPDATED : Saturday, 24 March, 2007, 12:00am

The worsening sub-prime mortgage business in the United States has not spilled over into other financial sectors in the country, according to HSBC Holdings chairman Stephen Green.

Mr Green said the prospects of the US sub-prime mortgage market remained unclear as the housing market was unstable but the economy was still growing.

HSBC's profit last year was held back by a surge of bad-debt provisions mainly related to the US mortgage business. It also changed some management of the US operations in recent months.

Mr Green expected the situation to stabilise gradually as long as the US economy continued to grow, the central bank did not raise interest rates and unemployment stayed low.

'So far, we have not experienced difficulties in other areas,' he said.

Mr Green said HSBC had not changed its plan to run down the sub-prime mortgage portfolio in two to three years.

He also played down speculation that HSBC might be interested in buying ABN Amro Holdings.