London-based HSBC has reduced property-linked exposure in China and managed to record lower expected credit losses in the sector.
HSBC reported $1 billion in expected credit losses (ECL) related to China’s commercial real estate sector, according to the bank’s annual report. This compares to $1.3 billion ECL charges for the sector in 2022. Overall ECL in 2023 totaled $3.4 billion, compared to $3.6 billion a year ago.
The British lender also reduced exposure related to Chinese property to $12.1 billion, compared to $16.8 billion a year ago. In 2023, the bank posted a pre-tax profit of $30.3 billion, up 77 percent.
2024 Outlook
Beijing has been actively making efforts to stabilize China’s ailing property which has seen a number of high-profiled defaults. Most recently, the nation’s «big four» banks have committed at least 60 billion yuan ($8.4 billion) to support the completion of eligible real estate projects.
«China’s recovery after reopening was bumpier than expected, but its economy grew in line with its annual target of around 5 percent in 2023,» commented HSBC chairman Mark Tucker. «We expect this to be maintained in 2024, with recently announced policy measures to support the property sector and local government debt gradually flowing through to the wider economy.»
