HSBC

HSBC Will Pay $1.6B to End Shareholder Lawsuit Over Subprime Unit

The banking giant probably wishes it had never bought Household International.

A unit of HSBC Holdings said on Thursday it will pay $1.575 billion to end a 14-year-old shareholder class action lawsuit stemming from the Household International consumer finance business that the British bank bought in 2003.

HSBC Finance Corp expects to take a roughly $585 million pre-tax charge in the second quarter for the settlement, which requires court approval. It said it could have faced liability as high as $3.6 billion.

The accord averts a second trial in the litigation, which had been expected to begin last week in the U.S. District Court in Chicago before being put on hold.

Rest here…

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