Blurred Picture at Jessops

Ten shares for a penny: what a bargain. Well, no, it's not, as HSBC discovered today when it made an unwanted entry into photography. It is taking a 47% stake in Jessops and writing off £34m of a £54m loan. Those shares, now worth 0.1p, traded at 155p five years ago.

What, you may ask, was a conservative bank like HSBC doing lending £54m to a smallish high street operator in a market where the internet was driving down the profit margins of camera retailers? Didn't it have better lending prospects in, say, the far east?

Jessops is another tale of those mad pre-credit crisis days when any company with a flimsy "growth" story could get a huge loan. The tale told by Jessops was that the arrival of digital photography had transformed its outlook. It had – but not for the better. By the time Jessops woke up to the opportunities, others had stolen the market. Most point-and-shoot cameras are now sold online.

The debt-for-equity swap, plus debt write-down, gives Jessops a chance to return to what it was; a middle-of-the-road retailer with 200-odd shops serving local communities.

In the context of HSBC, £34m is nothing. Nor, it should be said, was the bank the most enthusiastic lender in the wild days. Have we seen the last of the write-downs from elsewhere? Obviously not. But have adequate provisions been made? It is impossible to tell.