UPDATE 2-HSBC says Household liabilities fall to $70 bln

* HSBC says working off $20 bln in loans at HFC per year

* Household liabilities at $70 bln vs $79 bln at end 2009

* Says China plans unaffected by Beijing’s cooling measures

* Sees no increase in impairments from Eurozone debt crisis
(Adds background, executive quote)

By Kelvin Soh and Maggie Lu

HONG KONG, May 24 (BestGrowthStock) – HSBC Holdings (HSBA.L: )
(0005.HK: ), Europe’s biggest bank, is working off $20 billion
worth of loans per year in its U.S. Household Finance Corp. unit
as it winds down the business, said the bank’s CEO.

Household Finance Corp’s liabilities stood at about $70
billion, Chief Executive Michael Geoghegan said in Hong Kong on
Monday ahead of the bank’s annual shareholders’ meeting in London
on May 28.

The unit’s run-off portfolio, which excludes its credit cards
arm, was down from $78.9 billion in loans and advances at the end
of 2009 and $100.4 billion at the end of 2008.

HSBC is running down its U.S. consumer finance business after
losing billions of dollars as loans soured during the sub-prime
housing crisis.

Earlier this month, the bank said that in the first quarter
bad debts fell to their lowest level in more than two years, led
by a drop in the United States.

HSBC expanded in the United States when it acquired Household
Finance Corp at the beginning of the credit boom in 2003 for
$14.8 billion, a deal that allowed the traditionally conservative
lender to expand among U.S. subprime borrowers.

As the U.S. economy deteriorated from 2006, HSBC began to
pull back from U.S. subprime borrowers and stopped originating
home loans and auto financing. The move left HSBC’s main focus in
the world’s biggest economy on corporate and commercial business,
private and premier banking, and its credit card business.

Separately, HSBC executives said they saw no changes in the
bank’s China expansion plans due to Beijing’s efforts to cool
China’s economy (Read more about the fastest growing economy.), and also saw no increase in impairments from the
Eurozone debt crisis.

“Our major business is in the UK,” said Geoghegan. “And the
UK economy is in better shape than the EU”

Global markets have been gripped by fears that a debt crisis
engulfing Greece will spread to other highly indebted nations,
particularly in southern Europe, dragging down the continent’s
economy and hitting trade with the United States and Asia.

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UPDATE 2-HSBC says Household liabilities fall to $70 bln