HSBC’s China CRE provisions surge to cover one-fourth of book
Additional reserves and reduced exposure elevate ECL coverage for mainland portfolio
Provisions for HSBC’s mainland China commercial real estate (CRE) portfolio climbed to 23.6% of total loans in the third quarter, with the bank adding reserves while paring down exposures.
Expected credit loss (ECL) allowances on the portfolio climbed 5% to $2.1 billion – the highest level in a year. Provisions to total loans rose by 2.4 percentage points compared with end-June, indicating a 5.7%, or $535 million, decrease in the carrying amount of CRE loans.
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