HSBC agreed to sell a portfolio of U.S. consumer loans for $3.2 billion as it scales back its operations in the country.
The sale to Springleaf Finance, a subprime lender, and Newcastle Investment, a real estate investment trust, is slated to be completed in the second quarter, London-based HSBC said Tuesday. Both firms are backed by Fortress Investment Group. Springleaf will also buy HSBC's loan-servicing facility in Kentucky, the bank said.
HSBC Chief Executive Officer Stuart Gulliver has closed or sold 47 businesses since he took the top job in 2011 as he focuses on markets where the bank is most profitable. The lender is cutting back in the U.S. after its 2003 purchase of Household International Inc. required HSBC to set aside more than $65 billion for souring loans in the region.
"These agreements accelerate the run-off of the legacy consumer mortgage and lending business and are a continuation of HSBC's strategy to reposition its U.S. operations," HSBC Finance Corp. CEO Patrick Burke said in the statement.
HSBC completed the sale of its U.S. credit card unit to Capital One Financial Corp. for a premium of $2.5 billion in May.