Reuters-
* Bank says damages in FHFA lawsuit could be up to $1.6 bln
* H1 pretax up 10 pct to $14.1 bln as costs, bad debts fall
* Revenue drops 12 pct as emerging markets slow
* Expects to sell more U.S. loan portfolios in H2
* Shares down 4.4 pct (Releads with details on possible loss on U.S. lawsuit)
By Steve Slater
LONDON, Aug 5 (Reuters) – HSBC posted lower than expected earnings on Monday and said it might have to pay $1.6 billion in damages over a U.S. lawsuit, reviving concerns over legacy issues and growth prospects at Europe’s biggest bank.
Its shares fell more than 4 percent, after a slowdown in emerging markets contributed to a steeper than expected 12 percent drop in revenues in the first half of the year.
The London-based bank also said it may face a $1.6 billion settlement with a U.S. regulator over allegations it mis-sold mortgage-backed bonds during the housing bubble.
The Federal Housing Finance Agency (FHFA), the conservator of Fannie Mae and Freddie Mac, has alleged 18 banks misrepresented the quality of the collateral backing securities they sold between 2005 and 2008.
[REUTERS]
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