Standard & Poor's Ratings Services downgraded both Bank of America Corp. and the U.S. consumer-lending arm of HSBC Holdings PLC on Tuesday.

S&P reduced its credit ratings on B of A and its banking units because the ratings firm expects that economic weakness will persist, pressuring earnings more than has been expected.

The credit ratings agency said the Charlotte banking company's creditworthiness has deteriorated due to its exposure to consumer credit, and it warned that further writedowns associated with the Countrywide and Merrill Lynch acquisitions remain possible.

If earnings continue to decline, S&P said, additional government aid could be required. The company's ratings outlook is negative, meaning further downgrades are possible, S&P said. It last reduced its ratings on the company and its units in December.

Separately, S&P cut its credit ratings on the U.S. consumer lending arm of London-based HSBC after the unit reported a $1.8 billion fourth-quarter loss.

HSBC also said Monday that HSBC Finance Corp. will not originate any more loans and will shut its 800 remaining branches. The business has been weak for some time, and HSBC two years ago was one of the first companies to disclose subprime mortgage woes, a key component of the subsequent global credit crunch.

S&P cut its counterparty credit rating on HSBC Finance two notches, to A, and its grade on the company's hybrid debt three notches, to BBB, or two steps above junk status.

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