Wednesday 21 February 2018

HSBC reveals €1.8bn exposure to Irish banks and government

HSBC says it has a total of $400m (€290m) lent out to the Irish sovereign and related entities, with $2.2bn (€1.6bn) extended to Ireland's banks. Photo: Getty Images
HSBC says it has a total of $400m (€290m) lent out to the Irish sovereign and related entities, with $2.2bn (€1.6bn) extended to Ireland's banks. Photo: Getty Images

Emmet Oliver

HSBC, the world's sixth largest bank, has disclosed an exposure to Ireland's banks and government of $2.6bn (€1.8bn) but the lender says it is closely managing its investments in Ireland and other peripheral economies.

In new filings, the lender, currently headquartered in London, says it has a total of $400m (€290m) lent out to the Irish sovereign and related entities, with $2.2bn (€1.6bn) extended to Ireland's banks. The names of the institutions were not disclosed, but the holdings were registered at the year ending 2010.

Across Europe HSBC has exposures to peripheral governments of $8.4bn (€6.1bn), but when banks in these countries are added this figure rises to $25.4bn (€18.4bn).

Some of the exposure to Ireland is through derivative contracts and inter-bank lending. The bank's exposure to Ireland is almost twice the size of its exposure to Greece.

The bank has larger exposure to Belgium, Spain and Italy, three other countries with large budget deficits.

The annual report of HSBC Holdings plc makes it clear the bank views recent interventions by the European authorities as positive.

"We expect the ECB and eurozone countries will focus in 2011 on resolving intra-eurozone imbalances, rebuilding public finances, improving fiscal discipline, strengthening the banking system and managing cross-border risk," states the report.

As for its own exposures to the indebted countries, the bank says: "We have closely managed our exposure to sovereign debt during 2010. At the end of the year, our exposure to the sovereign debt of Belgium, Greece, Ireland, Italy, Portugal and Spain was $8.4bn.

"We regularly update our assessment of higher risk countries and adjust our risk appetite to reflect such changes," it added.

Irish Independent

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