HSBC announced today it will close both its HFC and Beneficial units, resulting in thousands of layoffs.
The consumer lending companies offer a number of products, including mortgages, home equity loans, and personal loans. Combined, the two units have 775 branches in 45 states.
“HSBC will continue to service and collect the existing receivable portfolio as it runs off, while continuing efforts to reach out and assist mortgage customers with their loan repayments and home preservation,” the company said in a release.
“The Consumer Lending branch offices, branded in the US as HFC and Beneficial, will cease taking new loan applications as soon as practical and substantially all branch offices will be closed as soon as commitments to customers are satisfied. “
The company said it remains committed to the “US financial services market” and its remaining U.S. based business units, such as its credit card subsidiary.
In late November, HSBC halted wholesale and correspondent lending thanks to ongoing disruptions in the credit markets.
At the time, the bank said it serviced over 400,000 first mortgages valued at over $68.8 billion, and more than 120,000 home equity lines with value in excess of $3.5 billion.
HSBC has also shut down most of its structured credit and mortgage-backed securities distribution operations.
The company reported a 2008 pretax loss of $15.5 billion in its U.S. operations today, compared with profit of $91 million in 2007.
It plans to raise $17.7 billion in new capital via share purchase program and cut 6,100 jobs.
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