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HSBC and AIG grow in Latin America, credit reporting in Australia
Hi -- even during summer subprime melt-down here in the U.S., big subprimers HSBC (Household) and AIG continue to grow overseas. And in Australia, moves to make credit histories more detailed. One day, the U.S. merger market will revive... Stay cool, -Matthew

Matthew Lee, Esq., Executive Director
Inner City Press / Fair Finance Watch
NCRC Board member - Global - NCRC blog =
Tel: 718-716-3540 - E-mail:

Paste - consumer finance in Ecuador (AIG) and Ecuador (HSBC), and credit reporting in Australia

Copyright 2008, Inc.
All Rights Reserved

Business News Americas - English

July 17, 2008 Thursday 1:47 PM GMT

LENGTH: 136 words

HEADLINE: Pichincha closes Colombian consumer finance unit sale to AIG unit for $105USmn


Ecuador's largest bank Banco Pichincha has closed the sale of its Colombian consumer finance unit Inversora Pichincha for some $105USmn to AIG Consumer Finance Group, a unit of US insurer AIG (NYSE: AIG ), according to Ecuadorian press reports.

Last March, Pichincha and AIG announced the transaction agreement.

Inversora Pichincha, Colombia's third largest consumer finance, provides consumer auto loans, commercial vehicle loans and unsecured consumer credit through direct and indirect distribution channels including auto dealerships, affiliated businesses and government agencies.

AIG Consumer Finance Group provides consumer finance products and services. In Latin America, the group already operates in Argentina, Brazil and Mexico.

LOAD-DATE: July 17, 2008

Copyright 2008, Inc.
All Rights Reserved

Business News Americas - English

July 17, 2008 Thursday 2:03 PM GMT

LENGTH: 369 words

HEADLINE: HSBC still pushing ahead with local growth plans despite global situation


The local unit of UK banking group HSBC (NYSE: HBC ) is still aiming for organic and acquisition-based growth despite the pressures on the global financial scene, recently appointed president of HSBC Brasil Shaun Wallis told local financial daily Valor Economico.

HSBC hopes to make emerging markets 60% of its profit base in the next ten years compared to the current figure of 51%, according to the paper. With $2US.18bn in profits, Latin America made up 9% of HSBC's 2007 net global profit, with Brazil and Mexico making up 40% and 45% of this respectively, according to the company's 2007 annual report.

The increased focus on emerging markets on the banking side matches statements heard from HSBC's insurance side. Last month, Marcelo Teixeira, head of HSBC insurance in Latin America, told BNamericas that he plans on making the region account for 20% of global insurance profits in 2009 compared to 16% in 2007.

Wallis did not elaborate on the bank's specific plans to make good on these goals but did rule out trying to be number one in Brazil or making large purchases, at least in the short run.

The most recent move by HSBC in Brazil was the expansion of its consumer finance distribution network through partnerships with retailers, including the announcement of a deal with electronics retailer Ricardo Eletro this week. Consumer credit, various loan products and insurance will be available at the various points of sale and kiosks HSBC started rolling out in April.


"Brazil is in a privileged situation. The country has oil, gas and food, all of which people want, and an enormous internal market. It is the most exciting place to be at the moment," the paper quoted Wallis as saying.

In the interview with Valor Economico, he also weighed in on the central bank's response to inflation, saying, "What is causing inflation here is growth, which is good for the economy, but it's necessary to avoid increases in public spending so as not to have a real problem with inflation"

The executive also foresees a correction in the gap between deposits and credit rates in Brazil, the report said.

LOAD-DATE: July 17, 2008

Copyright 2008 The Age Company Limited
All Rights Reserved
Sunday Age (Melbourne, Australia)

July 20, 2008 Sunday
First Edition


LENGTH: 957 words

HEADLINE: Telling banks all about you;

BYLINE: Tom Reilly


Despite fears of Big Brother-style snooping, moves are under way to give lenders greater access to consumers' financial details, writes Tom Reilly.

BANKS are set to get far greater powers to pry into consumers' finances under draft legislation to go before Federal Parliament within months.

For the first time, under the changes companies that provide credit history checks to lenders will be allowed to keep a file on individuals detailing their mortgage repayments, credit card bills, personal loans and even phone accounts under the new laws.

Concerns over the erosion of civil liberties led previous governments to resist calls from the financial sector for these greater powers, but record levels of bad debt and bankruptcies have led many to believe changes are vital to prevent consumers falling further into debt and ensure the health of the Australian economy.

The argument for more detailed checks has also been strengthened by a report from the Australian Law Reform Commission that concludes there is a need for change.

One government insider in Canberra said Prime Minister Kevin Rudd was keen to fast-track the changes. The more detailed credit checks are already common in countries such as the US and Britain.

"Some critics might talk about Big Brother snooping, but I think most people accept the change is needed," the insider said.

"The ALRC report will be a major part of the Government's argument that we need to start doing things differently, as their inquiries are always held in high regard for their independence and level of detail."

The report is in the hands of Special Minister of State John Faulkner and has to be made public by August 28, with possible legislation following soon after. The move to allow lenders greater access to financial details comes as more Australians struggle with personal debt due to rising food and petrol prices, the sharemarket collapse and higher interest rates forcing more families into mortgage stress.

Bankruptcies last month hit a 10-year high, with the biggest rise being among consumers. Some 82% of the 25,981 bankruptcies in the previous financial year were non-business.

The Reserve Bank announced more gloomy news last week, revealing that bad debts had risen by 68.5%in the three months to March, the largest quarterly increase on record.

While some consumer groups argue more detailed information could be misused by banks, nearly all lenders say greater access to information is needed so that they do not extend new loans to people already struggling.

At present lenders have no way of checking if a would-be-borrower is lying about how much they have already borrowed.

"There's no doubt that a lot of people who have got themselves into trouble with personal debt or credit cards wouldn't have been given loans or more cards by institutions if (the lenders) had access to more detailed financial records," says Christine Christian, chief executive of Dun & Bradstreet, one of two companies carrying out credit checks.

Australia now operates a negative-credit reporting system under which only a minimal amount of data is stored on a person's file. That includes the name, address, employer's details and a record of credit applications made over the past five years as well as details of any defaulted payments, bankruptcy notices and cheques over $100 that bounce.

The Law Reform Commission has strongly recommended that lenders be made aware of current credit account balances and limits, regularly updated payment history and details on opened and closed accounts.

Martin North of Fujitsu Consulting, which carries out studies on personal finance and mortgage stress, believes ignoring the commission's recommendations could undermine economic stability.

"At the moment it's far too easy for somebody with a poor credit history and little ability to pay to get hold of credit," he said. "We're seeing an increase in the amount of people who are simply getting one credit card after another as there's no mechanism to look at their total level of exposure.

"That situation is very dangerous for the individual who is getting trapped in more and more debt as well as the overall soundness of the economy." Mr North also said a change to positive credit checks could bring about a transparency that would advantage consumers.

"At the moment most big banks keep their own records and use them in conjunction with credit check companies. But these bank records are totally private, so if you've got a black mark on one of these files, whatever the reason, it could harm your ability to borrow money.

"If we go to a positive checking system, consumers will at least be able to access their file and query anything that's not right. A change would also enable customers with a better rating to use that standing to get more favourable terms when they negotiate a loan."

A concern raised by Carolyn Bond, co-chief executive of Victoria's Consumer Action Law Centre, is that banks may use broader credit checks in ways that lure customers into further debt.

"I agree that more information could provide better risk assessments by lenders, but I don't think it will necessarily bring about more responsible lending," she said.

"One particular risk is that lenders might look at a customer's credit rating and then try to get them to take out a bigger loan or send them a credit card with a much higher limit."

Debt register

� Impaired assets or bad debts rose by 68.5% - or approximately $7.29 billion - in the March quarter.

� Bad debts account for 0.31% of total lending, up from 0.19% in December.

� The average credit card balance is $2253.

� The only other western countries to use a negative credit reporting system like Australia's are France and New Zealand.


LOAD-DATE: July 20, 2008

ID: 41549
Author(s): NCRC - Matthew Lee
Publication date: 22/07/08

Created: 23/07/08. Last changed: 03/12/08.
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