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After Bad B&C News, Heads Roll at HSBC

HSBC Holdings said Bobby Mehta, CEO of HSBC Finance Corp., Charlotte, N.C., has resigned from the troubled subprime lender.

Additionally, the bank said Sandy Derickson, president and CEO of HSBC Bank USA, has departed as well. (She also carried the title of vice chairman of HSBC North America, a holding company that houses the subprime unit.)

News of the resignations came about 10 days ago, just after the last edition of National Mortgage News went to press.

Based in London, HSBC Holdings has extensive operations in the U.S.

Last month, the bank revealed that it had hiked the bad debt reserve on its U.S. subprime business by 20% to $10.56 billion.

Both executives worked for HSBC Finance's predecessor company, Household International, which was bought by the British bank for $14.4 billion in 2003.

Brendan McDonagh, chief financial officer of HSBC Finance, was named as Mr. Mehta's replacement. The bank named Paul Lawrence to succeed Ms. Derickson.

Mr. Lawrence serves as chief of corporate, investment banking and markets for HSBC Bank USA. HSBC Finance is in the process of trimming its subprime wholesale and correspondent network and is no longer funding "stated-income" loans.

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