Banks can’t shy away from responsibility for bad debts

From Ian Nelson

HSBC should clean up its own act before blaming others. HSBC CEO Michael Geoghegan’s comments re- garding bad debts, bankruptcies and IVAs are remarkable. It seems to be his view that it’s everybody’s faults but his.

Working for a lender that picks up the pieces after prime lenders, credit and store card providers have over-indulged their customers, I find his remarks unjust and ill-informed.

Our experience shows that nobody wants to enter into bankruptcy or an IVA and these are last resorts used by people whose debts are out of control.

High street banks cannot shy away from their part in this. Consumers are bombarded with offers of extended and unsecured credit, given with little consideration to how they will repay or manage these debts.

When the banks that offer credit cards reap interest rates of well over 10% and sometimes as much as 20% above base rate on much of this debt, their motivation is clear. At these rates, it’s no wonder that consumers who are wanting to take back control of their finances are taking up a range of options.

If Geoghegan would like to red- uce HSBC’s exposure to bad debts he should reconsider his lending criteria before criticising those addressing the problems these create.

Ian Nelson
Chief executive
Unity Homeloans
By email