Move follows sudden resignations of key executives at America operations HSBC Holdings, which issued a profit warning because of bad-loan problems in its United States sub-prime mortgage business, has appointed three executive team members to replace the management in place when it bought the US operation in 2003. Brendan McDonagh, chief operating officer of HSBC Finance, formerly known as Household International, becomes chief executive of the unit. He joined HSBC in 1979. Douglas Flint, group finance director and a board member of the parent company since 1995, will add the non-executive chairmanship of HSBC Finance to his duties. Paul Lawrence, head of HSBC's investment banking operations in North America, was named president and chief executive of HSBC Bank USA and HSBC USA Inc. He joined the bank in 1982. The moves follow the sudden resignations of Bobby Mehta (below) as chief executive of HSBC Finance and of Sandy Derickson as chief executive of HSBC USA. Mr Mehta had been with Household since 1998, and Ms Derickson since 2000. HSBC this month warned that it could set aside a provision of up to US$10.56 billion for the US mortgage business, 20 per cent more than anticipated by the market, in its 2006 results to be released on March 5. Following the warning, analysts cut their earnings forecasts for last year by 5 to 10 per cent. HSBC did not explain why Mr Mehta and Ms Derickson left, though group management hinted at changes in the US operation in a conference call held soon after the profit warning. Credit Suisse banking analyst Bill Stacey said he did not expect more senior management changes at HSBC Finance. Mr Stacey said the changing of the guard would be unlikely to affect HSBC's share price. The US business accounts for about 6 per cent of the bank's assets. HSBC Holdings chief executive Michael Geoghegan has said that since the problems in its sub-prime lending business emerged, the US unit had shifted its focus away from second-lien or broker-referred mortgages, where credit risks have increased along with the deterioration of the US housing market, towards the prime mortgage market. The acquisition of Household International was HSBC's first foray into sub-prime lending. Shares of HSBC Holdings yesterday were little changed at HK$138.80. This is also concern the bank may book a HK$10 billion provision on its British loan operations.