Report: HSBC Discusses Partnerships With Private Credit Firms

HSBC is reportedly considering getting into the private credit market.

The global bank has discussed potential partnerships with private credit firms, although the talks are at various stages and may not result in formal collaborations, Reuters reported Friday (April 11), citing unnamed sources.

HSBC did not immediately reply to PYMNTS’ request for comment.

The bank is looking to the private credit market to increase revenue after it underwent a restructuring, cut jobs and made a retrenchment in investment banking, according to the report.

At the same time, senior executives, including CEO Georges Elhedery, question whether the revenue will outweigh the costs, the report said.

In addition, the near-term demand for credit has declined due to corporate borrowers’ uncertainty about the effects of new U.S. tariffs, per the report.

Some other global banks have already moved into the private credit sector, the report said. Citi made a deal with private credit firm Apollo, J.P. Morgan set aside more money for direct lending deals, Goldman Sachs launched a private capital markets business called Capital Solutions Group, and Deutsche Bank made an agreement with its asset manager DWS to give it first preference on private credit deals, per the report.

When J.P. Morgan earmarked another $50 billion for its direct lending efforts in February, it was reported that the bank did so to gain a greater foothold in the fast-growing private credit market.

In the previous four years, J.P. Morgan deployed over $10 billion across more than 100 private credit transactions and worked with lending partners to allocate an additional $15 billion in private credit.

“Pairing our vast origination platform with our lender client base has supercharged our ability to deliver in size for borrowers and increased deal flow for lenders,” Kevin Foley, global head of capital markets, said at the time.

Estimates of the size of the shadow banking sector, which includes private credit, vary widely, PYMNTS reported Wednesday (April 9). The Financial Stability Board calculated that the nonbank financial intermediation sector was tied to $239 trillion in assets, and the more narrowly defined “other financial intermediaries” harbor assets of $68 trillion.

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