BusinessBusiness RecoveryHSBC blames bad debts on insolvency firms

HSBC blames bad debts on insolvency firms

UK's largest bank says aggressive marketing from insolvency industry is causing bad debts

HSBC’s chief executive Michael Geoghegan has blamed the rapidly growing
personal insolvency industry for the rising levels of bad debts.

This week the five largest banks in the UK are expected to report increased
bad debts. Geoghegan said that the marketing of bankruptcy and insolvency
agreements by firms was to blame for this, the FT reports.

‘It concerns me that there appear to be non-regulated advisers who are
advising people, and charging for this advice, to suggest that people should
file for bankruptcy,’ Geoghegan said.

Over the first half of this year, HSBC said bad debt provisions in the UK
rose to £361m to £265m. A third of the bank’s provisions on its UK unsecured
loan book were related to people going bankrupt or going into individual
voluntary arrangements (IVA). This was a 22% increase on the second half of
2005.

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