HSBC says "lull" in U.S. bad debt rise continuing

LONDON (Reuters) - Europe's biggest bank HSBC (HSBA.L) said slower growth in U.S. bad debts seen in the first quarter had continued in subsequent months, but warned of a possible deterioration in the second half.

HSBC earlier this month reported a U.S. home loan impairment charge of $3.2 billion (1.6 billion pounds), below analyst forecasts and below the previous quarter, though it was double the level of the first quarter of 2007.

Chief Executive Michael Geoghegan, speaking on the sidelines of the bank's annual shareholder meeting on Friday, said the "lull" was continuing, but that the first half of the year "always looks better" than the second half.

Geoghegan also said the bank would consider acquisition opportunities in developing markets, but said prices "aren't cheap enough yet" despite the current turbulence.

(Reporting by Steve Slater, Editing by Mark Potter)