HSBC moves HK$11 billion of Hang Seng loans to strengthen balance sheet

HSBC has taken on loans totaling HK$11 billion (about $1.4 billion) from its subsidiary Hang Seng Bank, a transaction carried out on arm-length terms during the first half of the year. The move is part of a broader effort to shore up Hang Seng’s balance sheet after investor worries during a prolonged property downturn. Hang Seng’s impaired loan ratio, which had peaked at 7 % at the end of 2025, fell to 4.6 % in the first half of this year as the bank reduced its “stage 3” loan book by HK$20 billion to HK$37 billion.

HSBC, which completed a $13.6 billion takeover of Hang Seng in January, declined to discuss the quality of the transferred loans. Outgoing chief financial officer Pam Kaur told an industry conference that the transaction lowers non-performing loans and provides more room to diversify lending beyond commercial real estate, and she will step down in 2027.