by Lawrence White, Sinead Cruise and Stefania Spezzati

London (Reuters) – HSBC is preparing a foray into the private credit market, five sources told Reuters to the fact of these projects, which constitutes the latest initiative of a global bank to penetrate this booming sector.

The HSBC plan – which Reuters reports for the first time – shows how the British bank seeks to increase its income after months of restructuring, job cuts and the vast reduction in its investment banking activities.

The group is already in talks with private credit companies regarding a possible partnership, two of the sources said, without identifying them.

The discussions are at different stages and there is no certainty that they will succeed, the sources said.

However, it is likely that the bank will not fully embark on private credit activity, as did some of its rivals, its senior executives, notably the director general Georges Elhedery, doubting that the revenues prevail over costs, said one of the sources.

The customs duties imposed by US President Donald Trump also had an impact on short -term credit demand, borrowing companies taking the measure of turbulence, which means that HSBC will adopt a more cautious approach, said a third source.

An HSBC spokesperson refused to comment.

When banks associate with private credit companies, the latter generally grant the loan while banks receive a commission for having found the customer and organized the transaction.

These partnerships allow banks to maintain relationships with their customers while limiting, or even eliminating, the risk for their capital.

Little regulated private credit providers, such as asset managers, are quickly gaining market share to the detriment of banks, who have hesitated to finance more risky customers due to capital and regulatory constraints.

Banks can however recover part of this market by concluding agreements with private credit companies, as did Citi with Apollo in 2024.

HSBC may not set up a separate unit or team to manage private credit, as other banks have done, for cost reasons, said two of the sources.

Instead, it could offer private loans through its existing asset management and life insurance activities in Hong Kong, they added.

Jamie Markham, head of the management of credits and capital, that HSBC hired in February 2023 from JPMorgan, is the person responsible for supervising this planned expansion, according to a source.

He did not immediately respond to a comment request.

(Report Lawrence White, Sinead Cruise and Stefania Spezzati; with the contribution of Tommy Reggiori Wilkes in London and Selena Li and Sumeet Chatterjee in Hong Kong; Diana Mandia)

Copyright © 2025 Thomson Reuters