HSBC Shakes Up Executive Ranks

Bobby Mehta, CEO of HSBC Finance Corp., Charlotte, N.C., has resigned from the troubled subprime lender, according to HSBC Holdings' London office.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 Thursday, about a week after HSBC Holdings 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 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.