“It won’t happen again,” Michael Geoghegan, HSBC chief executive, told analysts on Thursday. He was referring to misjudged lending practices at the bank’s US consumer finance arm, which resulted in Wednesday’s profit warning. Investors must hope there will be no recurrence, either, of the increase in provisioning, which analysts think will knock about 8 per cent off 2006 earnings.

The problem area is the mortgage loan book of the former Household Finance, the US consumer finance business acquired in 2003. HSBC warned that its troubles would push the consensus estimate for its 2006 impairment charge up by 20 per cent. This reflects a rapid deterioration in its $10bn second-lien mortgage book, which has been hit by a double whammy: higher interest rates have caused defaults to rise while a weak housing market has eaten away any equity the bank might have claimed.