1 year ago
HSBC Pushes Hang Seng Bank to Offload Bad Hong Kong Property Debt
HSBC, a large bank, is telling its Hong Kong branch, Hang Seng Bank, to get rid of some bad loans.
These are loans given to people and companies who can't pay them back, mostly for properties in Hong Kong.
The Hong Kong property market is struggling, so many loans have become 'bad.'
HSBC wants Hang Seng to sell these loans to other companies to help the bank.
This is happening because the amount of unpaid loans has greatly increased recently.
HSBC is directing Hang Seng Bank to sell portfolios of bad real estate debt.
Hang Seng's impaired Hong Kong real estate loans have increased significantly.
The Hong Kong banking sector faces strains from the real estate slump.
Hang Seng is looking to offload portfolios backed by real estate from developers.
HSBC is aiming for a speedier and more holistic approach to managing bad debt.
- Who
- HSBC, Hang Seng Bank
- What
- HSBC is pushing Hang Seng Bank to sell portfolios of bad real estate debt.
- Where
- Hong Kong, with real estate assets in mainland China.
- When
- About two months ago, HSBC directed Hang Seng Bank to begin selling the debt.
- Why
- Due to growing concerns over the struggling Hong Kong property sector and rising impaired loans.
Key facts
- HSBC Directive
- Directing Hang Seng to sell bad real estate debt
- Hang Seng Bank
- HSBC's Hong Kong subsidiary, 63% owned by HSBC
- Impaired Loans (Hang Seng)
- HK$25 billion ($3.2 billion) as of June
- Loan Portfolios For Sale
- Worth over $3 billion
- Proposed Fund
- HK$20 billion fund for distressed properties by China Real Estate Chamber of Commerce
Quotes
An HSBC spokesperson
A representative of HSBC
“All banks constantly look to optimise their credit portfolio, manage their risks, and take decisions that carefully consider the impacts on their customers.”
livemint.com
“Hang Seng takes its own decisions under its own governance.”
livemint.com
A spokesperson at Hang Seng
A representative of Hang Seng
“bank manages credit risks of our loan portfolios according to international regulations and accounting standards, including timely and appropriate loan classification and provisioning as well as loan recovery and disposal.”
livemint.com
Sources
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