SINGAPORE Reuters - HSBC Holdings PLC expects the debt issues involving embattled property developer China Evergrande Group to have an impact on capital markets, but does not see any direct impact on the bank, its CEO said.
I'd be naive to think that the turmoil in the market doesn't have the potential to have second-order and third-order effects, Noel Quinn said at a Bank of America conference on Wednesday, according to a webcast on HSBC's site.
Evergrande's situation was concerned and there is a potential for second and third-order impact, especially on the market capital and bond markets. And we must continue to be close to that, he said.
Evergrande faced a Thursday deadline to pay interest on one of its dollar bonds in a critical moment for global investors worried that its malaise could spread beyond the country's property sector.
Quinn said that HSBC was very focused in its commercial real estate business in China and Hong Kong.
We focus typically on Tier 1 cities, Tier 1 properties, Tier 1 lenders. We have a well managed exposure there. We're not unduly concerned by that exposure, he said.
Quinn said HSBC loan loss provisions in Hong Kong and China as highlighted in its half-year results https: www.reuters.com. The article US-HRC - HHLDS-RESULts - CHINESE commerce indicated that the lender was not concerned about its commercial real estate exposure in China.
Nothing has happened in recent weeks that will change this position in my mind for us as a bank, as an institution, Quinn said.