Market Chatter: Hong Kong Banks Step Up Collateral Sales, Liquidations to Cut Bad Debt

MT Newswires Live
05/12

Hong Kong banks are stepping up efforts to clean up a growing pile of bad loans, with special asset bankers increasingly turning to tougher recovery measures such as collateral sales and borrower liquidations, Bloomberg News reported Monday.

The city's distressed loan ratio has climbed to a two-decade high as soured debt reached about HK$200 billion, driven largely by losses tied to Hong Kong commercial real estate, the report said.

At least six lenders have expanded their special asset or recovery teams, including Bank of East Asia (HKG:0023), United Overseas Bank's (SGX:U11) Hong Kong branch, Bank of China (Hong Kong) (HKG:3988), and Hang Seng Bank, according to people familiar with the matter cited by Bloomberg.

The banks are reportedly seeking to accelerate loss recovery and free up capital for fresh lending as broader economic conditions improve.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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