HSBC takes a cautious step into private credit after setting aside funds for alleged UK fraud-related losses

Tue, 05 May 2026 13:58:00 +0200

HSBC has made a tentative move into the private‑credit market after allocating a reserve to cover potential losses linked to an alleged fraud in private markets in the UK, according to reporting from The Wall Street Journal. The bank is stepping into this fast‑growing asset class at a time when regulators and investors are scrutinizing the risks associated with private credit, including transparency, valuation, and fraud. HSBC’s entry follows a broader trend of global banks expanding into private lending as traditional lending margins compress and investors chase higher yields. However, the bank is reportedly taking a more cautious approach than some rivals, avoiding a full‑blown private‑credit platform and instead limiting its exposure while still positioning itself to capture fee income and client relationships. The reserve set aside highlights the inherent risks in direct lending, where loans are often held off public balance sheets and rely heavily on bespoke documentation and inte