HSBC’s China real estate exposures see fourfold rise in defaults

Proportion of “impaired” exposures to mainland investments jumped $1.7 billion in six months

HSBC has taken a battering from China’s housing market downturn, with defaults among its exposures to the sector rising fourfold in the first half.

Around $2.3 billion, or almost 12%, of the bank’s $19.8 billion exposure to mainland China’s commercial real estate was deemed “credit impaired” internally at the end of June – up from $604 million, or 3%, at end-December. The increase in impairments overwhelmingly accrued to exposures booked in Hong Kong, which account for around 60% of the total.