HSBC Financial Corp. Ltd. announced that it will close 30 of its 140 branches in Canada by October 31st in an effort to limit lending practices amid the ongoing mortgage crisis.
Roughly 300 employees are expected to be affected by the decision, though the mortgage lender noted that some will be offered positions elsewhere within the company.
The home loan subsidiary said it will discontinue its non-prime, mortgage broker-based mortgage services in Canada as part of its “repositioning”.
The lending unit, which operates separately from HSBC Bank Canada, is a subsidiary of a similar U.S. operation (Decision One) that has suffered in the U.S. subprime mortgage crisis, according to spokesman Michael Edmonds.
The move is a clear sign that countries other than the United States are not immune to the enduring credit crunch.
Home equity loans have recently fallen out of favor with investors as rising delinquencies and defaults have stamped out demand for such securities.
Late last month, HSBC shut down its U.S.-based wholesale subprime lending unit Decision One, taking a $954 million hit in the process.
The closure resulted in 750 job losses, though HSBC said it would still offer subprime mortgages through its US branches under its HFC and Beneficial brands.
See the latest list of closed lenders, mortgage layoffs, mergers, and rumors.