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HSBC, UBS among big banks to have cut exposure to China Evergrande as outlook worsens for debt-stricken developer
- Financial companies have sought to reassure investors in recent days, saying their Evergrande exposure is immaterial or minimal
- Concerns over Evergrande risk have shaken financial markets
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Big banks and fund managers have been heading for the exit and reducing their exposure to China Evergrande Group in recent weeks as the outlook has soured for the world’s most indebted property developer.
As a result, many financial companies sought to reassure investors and downplay their exposure as questions lingered about whether Evergrande managed to make an US$83.5 million coupon payment due on Thursday.
The Shenzhen-based company had some US$300 billion in liabilities at the end of the first half of this year, and concerns about potential contagion have sent borrowing costs soaring for other property developers and shaken financial markets.
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UBS Group CEO Ralph Hamers said the bank’s exposure to Evergrande was “immaterial” and limited to collateral calls on margin loans, while rival Credit Suisse said it was not “an existing lender to Evergrande and we have no direct lending exposure to the company”.
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Angry protest at headquarters of China Evergrande as property giant faces liquidity crunch
Angry protest at headquarters of China Evergrande as property giant faces liquidity crunch
HSBC CEO Noel Quinn told a banking conference this week that the situation surrounding Evergrande was “concerning”, but the bank had not seen any direct effects from the situation and he was not worried about the lender’s exposure.
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