NEW YORK, Nov. 15, 2007 – Two investment banks said yesterday that they would take additional write-downs because of problems related to the housing market, according to the New York Times.
HSBC Holdings said in London that losses in the United States housing market were spreading to credit card and other consumer loans, forcing the bank to set aside $3.4 billion to cover bad loans, more than it had forecast about four months ago, the Times said.
In New York, the Times said, the brokerage firm Bear Stearns said it would take a $1.2 billion write-down on its exposure to securities tied to subprime mortgages.
Bear’s chief financial officer, Samuel L. Molinaro Jr., said at an investor conference that Bear Stearns had reduced its holdings of collateralized debt obligations–complex pools of securities linked to plummeting subprime mortgage loans–to $884 million through Nov. 9, from $2 billion at the end of August, according to the Times. Molinaro also told the newspaper that the firm’s exposure to subprime mortgages had been reduced to a short position, from $1.1 billion at the end of August.
HSBC said it had set aside $1.4 billion more than was anticipated because of a “broader deterioration” in the United States housing market. It also said it would take a $55 million charge to close 260 more consumer finance branches in the United States, according to the Times.
