HSBC has told some private credit clients that it will not renew certain lending facilities and will stop providing subordinated leverage financing, according to reports on July 7.
The bank concluded that some private credit fund relationships did not provide sufficient return for the risk involved and is shifting capital toward lower-risk private credit funds. HSBC said it continues to serve the private credit market with central oversight and is prioritizing support for key clients in markets where activity fits its strategy.
Reports said the decision followed a series of corporate bankruptcies that increased scrutiny of underwriting standards in parts of the private credit sector. In its first-quarter 2026 investor presentation, HSBC disclosed total private markets exposure of $111 billion, including $22 billion of private-credit-related exposure, with $16 billion drawn and $6 billion committed.
On May 5, HSBC also disclosed a $400 million loss tied to private-credit-related loans connected to the collapse of UK mortgage lender Market Financial Solutions. It later paused a previously announced plan to invest $4 billion into its own private credit funds while maintaining that it remained committed to private credit investing.