Washington: As the world continues to reel under the financial turmoil that started with risky subprime lending, a new study has found that Citigroup, HSBC and AIG are among the 25 biggest originators of such loans worth about $1 trillion.
The study conducted by the US-based non profit organisation Center for Public Integrity (CPI) has revealed that these 25 entities accounted for a whopping 72% of subprime loans during the 2005-07 period.
Topping the list is Countrywide Financial Corp which shelled out subprime loans worth $97.2 billion while CitiFinancial/Citigroup Inc’ is at the 16th place and had generated $26.3 billion in such loans.
At the ninth spot, HSBC Finance Corp/HSBC Holdings Plc had raised $50.3 billion in subprime loans. According to the study, the entity has stopped lending now.
American General Finance Inc/American International Group ,with $21.8 billion subprime loans, was ranked 18th.
Wells Fargo placed at the eighth position which raised $51.8 billion in high risk loans.
“... the top 25 originators of the high-interest loans, accounting for nearly $1 trillion and about 72% of industry-reported subprime loans during that period (2005 - 07),” the CPI said.
The study is based on the analysis of government data on nearly 7.2 million “high-interest” or subprime loans made from 2005 through 2007 — a period marked “the peak and the collapse of the subprime bottom”.
During that period, Ameriquest Mortgage Co/Acc Capital Holdings Corp, which is at the second spot, raised $80.6 billion in subprime loans, followed by New Century Financial Corp ($75.9 billion), First Franklin Corp/National City Corp/Merrill Lynch ($68 billion), Long Beach Mortgage Co/Washington Mutual ($65.2 billion).
Meanwhile, 20 of the top 25 subprime lenders have closed, or stopped lending, or been sold to avoid bankruptcy. Most were non-bank lenders, it added.
Other names in the list include WMC Mortgage Corp/General Electric Co ($49.6 billion), BNC Mortgage Inc/Lehman Brothers ($47.6 billion), IndyMac Bancorp ($26.4 billion), and Wachovia Corp ($17.6 billion).