HSBC to inject 4 billion dollars into its credit funds

By iain withers and Lawrence White

LONDON (Reuters) -The largest bank in Europen, HSBC will inject $ 4 billion into private credit funds, amid a wider batch of banks in the prosperous market where profits of traditional lending were subjected to pressure.

HSBC said it will invest money in HSBC ASBC Management (HSBC AM), with the aim of attracting additional capital from external investors to build a $ 50 billion credit fund within five years.

The global private credit market provides $ 2 trillion dollars in corporate lending outside the most organized banking system, dominated by private stock giants such as Blackstone and Ares Management.

Banks are trying to go, with some such as Citi and UBS with the current players APollo and General Atlantic. Others have moved like Deutsche Bank and HSBC to build their own projects.

“It is the arms race,” Nicholas Moro, CEO of HSBC AM, told Reuters, adding that getting the HSBC group for its own credit funds will help the company attract external funds.

Despite its smallness in the context of the HSBC’s public budget, which is worth $ 3 trillion, this step is part of CEO George Ilidiri’s strategy to increase revenues in areas with a higher return such as private credit instead of relying on low bank loans.

Reuters first reported in April that HSBC was exploring options to accelerate your credit growth.

The HSBC AM credit unit plays the most firm players. It has been published 7 billion dollars through 150 transactions since its launch in 2018.

Moro added that the new funds will be invested worldwide, with the initial focus on fields, including direct lending in the United Kingdom and Asia.

(Participate in coverage by IAIN Withers and Lawrence Whiteeding by Anousha Sakoui and David Holmes)