LONDON (BLOOMBERG) – HSBC Holdings’ recently-installed chief Noel Quinn has tasked his top bankers with creating a global restructuring team for corporate clients struggling over the coronavirus pandemic.
Gregory Guyett, co-head of global banking and markets at HSBC, told employees this week that chief executive officer Quinn asked him and global commercial banking head Barry O’Byrne to assemble a global team to help clients with difficulties in this environment, according to people familiar with the matter.
Patrick Nolan, global head of corporate banking, will lead the yet-to-be-created unit and has been named head of client leadership, according to an internal memo seen by Bloomberg. Guyett said the bank would have to support the restructuring of some of its clients, while balancing the lender’s own needs. Nolan will relinquish his corporate banking role. HSBC’s chief risk officer Pam Kaur will also be involved in the work.
The contents of the memo were confirmed by an HSBC spokesman, who declined to comment further.
As one of the world’s largest lenders, HSBC is likely to be involved in numerous restructurings stemming from the crisis.
It is one of a group of banks with an exposure of at least US$3 billion (S$4.27 billion) to Singapore oil trader Hin Leong Trading (Pte) Ltd., which is in talks over shoring up its finances. HSBC has the biggest exposure to Hin Leong at about US$600 million, people familiar with the situation have told Bloomberg News.
HSBC, which is reporting its first quarter results this month, isn’t alone in its exposure to global oil firms. JPMorgan Chase & Co and Wells Fargo & Co this week posted their highest loan-loss provisions in a decade, setting aside more than US$12 billion to cover defaults across the economy, but especially from credit-card borrowers and oil companies.
The International Monetary Fund has predicted that the “Great Lockdown” recession would be one of the worst in a century, and global gross domestic product would shrink by 3 per cent this year.