HSBC Buys Champion Mortgage Portfolio

HSBC Holdings said it bought the $2.5 billion mortgage loan portfolio of Champion Mortgage, a division of KeyBank.

The portfolio is comprised of the mortgages of about 30,000 customers, HSBC said in a statement. Financial details were not disclosed.

"Champion's loan portfolio is a very good fit for HSBC's consumer lending business; these are customers we know how to serve well," said Tom Detelich, president of the consumer lending division of HSBC Finance Corp.

HSBC's consumer lending business operates in the U.S. under the HFC and Beneficial names. It is one of the nation's largest consumer finance companies, with more than 1,350 branches in 46 states.

Champion Mortgage, based in Parsippany, New Jersey, is part of the consumer finance division of KeyBank NA, which is a unit of Cleveland-based KeyCorp. Champion serves mostly non-prime customers in 26 states across the United States.

KeyBank also agreed to sell the rest of Champion's business to an affiliate of Fortress Investment Group LLC.

As a consequence of the transactions, KeyBank expects to incur a net charge of about US$164 million (euro124.3 million) in the fourth quarter due to a US$170 million (euro128.9 million) write-off of goodwill associated with the company's 1997 acquisition of Champion.

The Champion Mortgage finance business contributed US$89 million (euro67.5 million) to KeyBank's revenue and US$20 million (US$15.2 million) to Key's earnings in the first nine months of 2006.

KeyBank first said in August it was exploring a sale of Champion, which provides mortgage.