HSBC Asks Hang Seng Bank to Clean Up Bad Hong Kong Property Debt
(Bloomberg) – HSBC Holdings PLC took an unusual step to involve the portfolios of the Bad Real Estate debt, a subsidiary of Hong Kong.
About two months ago, the lender, the London -based global company credit official and the president of the private credit unit, Hang Seng’in special negotiations to those who want to start the process of selling portfolio to start the process of selling.
The pushing results show, Hang Seng Bank is now in the early stages of selling a number of property -supported credit portfolios with more than $ 3 billion. The movement came after Hang Seng’s corrupted Hong Kong real estate loans saw a 85% leap annually.
The Hong Kong banking sector has faced strains from the worst real estate collapse since the Asian financial crisis in the late 1990s. In the industry, even the discussions of creating a “bad bank” have been made to take over the sour loans, which Fitch Ratings predicted about $ 25 billion based on Hong Kong Monetary Authority data.
HANG Bank, which is approximately 63% of the HSBC, has overturned the loan to the Hong Kong commercial real estate of $ 25 billion ($ 3.2 billion) as of June.
“All banks are constantly trying to optimize the credit portfolio, manage their risks and carefully evaluate the effects on their customers,” an HSBC spokesman said. He said. “Hang Seng takes his own decisions under his own governance.”
A spokesman in Hang Seng said that the lender did not comment on Bloomberg’s reporting and that “the bank manages our credit portfolios according to international regulations and accounting standards, including timely and appropriate credit classification and provision, credit rescue and disposal”.
HSBC also rearranged the best leadership in Hang Seng and changed Diana Cesar, CEO of HSBC’s president Luanne Lim.
The international section of the Hong Kong and China Chamber of Real Estate Commerce proposed the government to establish $ 20 billion HK funds to invest in troubled properties to help prevent systemic financial risks.
Hong Kong Banks relied on their own individual relations with special lenders and other key corporate relations to help them buy assets individually without a clear strategy to address unpaid loans.
HSBC said he wanted to eliminate the best bankers in London by involving a faster.
Under the new supervision of the HSBC, it aims a holistic approach rather than piece by piece of initiatives. In order to meet these requirements, Hong Kong lent, the lending, reached the consultants to help regulate the sale.
Halk, Hang Seng’s Emperor International Holdings Ltd. and Tai Hung Fai Enterprise Co. Hong Kong developers, including the real estate assets supported by the two portfolios, he said. The third portfolio is supported by the real estate scattered in the Chinese mainland.
People said it was subject to an early stage and change. Bloomberg News previously reported that Hang Seng wanted to sell one of these portfolios.
Following the crisis in the late 1990s, HKMA applied three main directives, including the developed HKMA control and more credit supervision of banks to ensure that banks make solid decisions while allocating capital.
However, none of these directives made a clear plan on how to manage bad debt. In addition, Hong Kong, who is responsible for past cleaning, left almost the entire sector and left an institutional information gap.
Nevertheless, a clear question about how well the directive of HSBC will be followed. Hang Seng and consultant companies have reached several private credit companies, no party has given clear instructions in the next steps to get the loan.
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