The death of consumer finance?
More importantly, HSBC said it was finally throwing in the towel on consumer finance. The company owns the old Household International and Beneficial consumer lending businesses. They made higher-risk personal, auto, and home equity loans to borrowers with weaker credit profiles. It is planning to completely exit that business over the next five to seven years, shutting down 800 branches and slashing more than 6,000 jobs.
I've been following this industry a long time, and I remember during the late 1990s and early 2000s how consumer finance was the place to be. Companies like Beneficial, Household, the Associates, and others were all pursued by traditional banks, and loved by investors, for the higher returns they generated by extending credit to crummy borrowers. Now? Not so much. In addition to HSBC getting out of the business, Citigroup is trying to dump the albatrosses that are CitiFinancial (which includes units of the old Associates) and CitiMortgage. I guess you could call it the "Death of Consumer Finance."