HSBC plans to sell Hang Seng Bank's high-risk loans, FT reports

HSBC (0005) is in talks with investors to sell Hang Seng Bank's high-risk loans, Financial Times reported, citing people familiar with the matter. 

In recent months, HSBC has opened access to Hang Seng's loan asset portfolio to debt investors, according to the report. However, sources said the negotiation process could face significant hurdles, as private debt funds would demand steep discounts to purchase these loans.

HSBC said its top priority remains supporting its clients and that it will continue to take routine measures to manage its overall portfolio as part of its prudent risk management approach, according to the report.

In September last year, Bloomberg reported, citing sources, that HSBC had taken the unusual step of directly intervening to push Hang Seng to accelerate the sale of its distressed real estate debt portfolio, with the latter at an early stage of selling a series of property loan portfolios worth more than US$3 billion (HK$23.4 billion).

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