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Last Updated: Thursday, 8 February 2007, 08:04 GMT
US housing slowdown knocks HSBC
HSBC bank
The news hit HSBC shares
Banking group HSBC has warned that its bad debt provisions for 2006 will be 20% higher than expected - after problems in the US housing market.

Bad debt provisions across the group are now set to be about $10.5bn (5bn).

The slowing growth of the US housing market had led to more people not meeting repayments, HSBC said, increasing its liability.

Homeowners had fewer ways of refinancing loans because property prices were not rising, it added.

BBC business editor Robert Peston said that the news was a "warning to others banks to watch out".

However, HSBC said that, aside from its US mortgage business, the rest of its 2006 performance had been in line with expectations.

In trading in Hong Kong, HSBC shares fell 2.4% .

"This is something which surprised the market, providing investors with a reason to sell quickly," said Celestial Asia Securities director, Kitty Chan.


SEE ALSO
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