HSBC is halting lending to riskier private credit clients after high-profile bankruptcies cast doubt on underwriting standards in the sector and pushed banks to cut their exposure, the Financial Times reported on Tuesday, citing three people familiar with the matter.
The bank has told some clients it will not renew their
lending facilities after deciding to stop lending to private
credit funds that did not offer sufficient returns to justify
the risk, the report said. It will instead focus on lower-risk
private credit funds, the report added.
HSBC did not immediately respond to a Reuters request for
comment outside regular business hours.
Exposure to private credit lending has troubled Europe’s biggest
lender, adding to the market jitters around the sector. HSBC in
May took a $400 million hit linked to the collapse of British
mortgage lender Market Financial Solutions.