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HSBC, the largest bank in Hong Kong and Europe, is seeing more business from ultra-rich clients who are eager to borrow against their “illiquid or concentrated” assets amid interest-rate uncertainty.
While high interest rates hurt the flow of the private bank’s lending business, it opens up opportunities on the structured lending side, said Jyrki Rauhio, head of credit advisory for Asia-Pacific at HSBC Global Private Banking.
“A lot of our clients still have a huge amount of their wealth tied up in illiquid assets or concentrated assets,” said Rauhio. The bank has “quite an active pipeline” for loans based on such collateral, which includes art, yachts, jets, single stocks and private equity, he said.
“This is an area that is increasingly becoming interesting for clients to raise money. Yes, it costs you. But if you can plough it back into your business, why not? People are tapping these slightly more alternative sources more actively now.”
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