A major bank has announced that the amount of bad debt it has accumulated is falling despite it accounting for a fall in profits for certain areas of the bank.
The chief executive of HSBC, told reporters they have seen a small rise in bad debt which means their profit is largely flat.
The amount of bad debt has particularly affected the retail arm of the bank.
The increase in the number of bad debts has been partly blamed on a relaxation of bankruptcy legislation, and areas that have been particularly prone include American property loans and British unsecured lending.
However, according to the heads of the commercial finance section and personal finance section of HSBC, bad debt is not affecting their divisions so much with the level actually decreasing by £13 million since last year.
When they looked at a one year-old loan in 2004, 2.2 per cent were going bad. Now just over 0.5 per cent go bad.
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