HSBC Holdings PLC said Monday that its third-quarter pretax profits climbed from a year earlier, even though its HSBC Finance Corp. in the United States incurred $4.2 billion of impairments.
Asian operations remained the core driver of growth, the London company said.
Results from the U.S. consumer finance business, HSBC's hardest-hit line in the credit crisis, were in line with expectations, the company said, but trends point to further deterioration in the near and medium term.
Card and retail services, driven by personal bankruptcy filings, accounted for the largest portion of the impairment charges at HSBC Finance. Charges stabilized in mortgage services, the company said, though risks remain as a result of depreciating home values and rising unemployment.
HSBC also reported marked impairment increases in consumer lending.
In Asia, which has offset U.S. impairments for the past year, there were signs of a slowdown, the company said, with personal financial services revenue declining in Hong Kong on lower deposit margins. Commercial banking revenue "held up well" there, and both personal and commercial banking revenue grew strongly in the Asia Pacific region, though there were some increases in impairment charges.