HSBC (HKG:0005) believes the downside risk from its Hong Kong commercial real estate exposure is "well contained," The Standard reported Wednesday, citing remarks from senior management.
The bank booked $1.1 billion in expected credit losses in the second quarter, including $400 million linked to Hong Kong's commercial property sector.
Chief Executive Georges Elhedery said the bank has a $500 million allowance covering a $1.4 billion segment of credit-impaired loans with loan-to-value ratios over 70%, according to the report.
Chief Financial Officer Pam Kaur said the bank remains "very comfortable" with the 42% of its local CRE book that is unsecured, noting most loans are granted to listed conglomerates with strong cash flow, it added.
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