HSBC On Friday (May 15), it responded to a media report that it had paused a $4 billion investment in its private credit funds, saying it remained committed to that work.
“We are committed to our asset management offerings in private credit funds,” the bank said, according to what was reported on Friday. a report By Reuters.
It was the Financial Times I mentioned Earlier on Friday, HSBC temporarily halted private credit investing after losing $400 million it had invested in a credit fund.
The Financial Times report said that while the bank announced in June that it would invest $4 billion in private credit funds for asset managers, it had not done so nearly a year later.
The report quoted unnamed sources that the bank has not yet transferred any funds to the asset manager and that it has no plans to do so. One source told the Financial Times that executives have become cautious due to uncertainty in the US credit market.
HSBC has “substantially completed” a review of its lending practices after a $400 million loss, the Reuters report said.
Advertisement: Scroll to continue
HSBC said in its May 5 earnings statement that $400 million Expected credit loss The reason in the first quarter was “secondary exposure related to fraud and securitization with a UK financial sponsor” in the bank’s corporate and institutional banking businesses.
The bank’s total private credit exposure is $22 billion, or about 2% of its loan book, according to a May 5 presentation. Within this category, its total exposure to securitization financing is $3 billion. HSBC’s total exposure to private markets is $111 billion.
HSBC Group Chief Financial Officer Pam Cor The bank has updated its risk appetite, incorporated lessons into its due diligence processes, and remains comfortable with its private credit exposure remaining within 2% of its balance sheet, he said during an earnings call on May 5.
This was reported in April 2025, before HSBC announced its planned investment in… Private credit The bank was considering entering the private credit market to increase revenues after undergoing a restructuring process, cutting jobs and reducing expenses in investment banking. Meanwhile, senior executives wondered whether revenues would outweigh costs.
