HSBC Faces Round Two of Subprime Punishment

When the subprime-mortgage crisis hit in the U.S., global banking giant HSBC Holdings PLC was among the first to get clobbered. Now it could be headed for round two.

Through its subsidiary, HSBC Finance Corp., HSBC is a big holder of risky U.S. consumer loans, a toxic portfolio on which it has already taken more than $40 billion in impairment charges. This year, HSBC raised $18.5 billion in fresh capital and said it would wind down most of HSBC Finance, moving to close a bad chapter in the parent bank's 144-year history.