The world’s local bank blames UK borrowing on an otherwise perfect day

Is it too easy to get out of paying your debt? Or more to the point, are independent advisors dangling the carrot of bankruptcy or Individual Voluntary Arrangements making it too easy?

Michael Geoghegan, the chief executive of HSBC, thinks so. Yesterday he said  – ‘We are concerned that independent advisers, who are not regulated, are telling kids to just not bother paying their debts. They are saying, Give us a couple of grand and we’ll make it go away’.

It’s a problem for the bank, because yesterday it revealed its results, and bad debt was one of only two blots on an otherwise good day for shareholders in the world’s third largest bank.

Profits for the first six months of this year came in at £6.7billion or $12.5 billion, that’s 37 percent up on last year.

Corporate lending and investment banking were partially behind the good results, while profits in China, Brazil and India were up by more than 20 percent.

But it was bad debts that led to the bank sounding its biggest note of caution. Bad debts soared 19 percent, to $3.89 billion, and the UK got the blame for most of this rise. Apparently unsecured lending in the UK was the major factor behind the increase. [...]

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