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HSBC can still grow revenues even after rates peak - CFO

Kitco News

LONDON, Sept 19 (Reuters) - HSBC can still grow its global revenues even as central banks look to dial down interest rate rises in their battle against inflation, the bank's Chief Financial Officer Georges Elhedery told a conference on Tuesday.

Elhedery said balance sheet growth would be difficult in 2023 due to lower demand for loans, but he expected this to change sometime in 2024, with the bank targeting growth in areas including wealth management in Asia.

"In the medium term, we do expect and do have ambition to continue growing (by) mid-single digit percentage points our balance sheet," Elhedery told an event hosted by Bank of America (BofA).

Elhedery said the bank's overall loan book was performing well, but he said offshore-booked commercial real estate loans in China had been "severely affected" by recent turmoil, resulting in additional charges booked in the second quarter.

China's property market has been hit by a liquidity crisis that has impacted several high-profile developers, although two debt deals on Tuesday brought some relief.

Standard Chartered (STAN.L) CEO Bill Winters later told the BofA event he predicted further fallout for lenders.

"Banks have not taken all the pain they're going to take, broadly... including in China, in my opinion," Winters said.

"We've taken the better part of a billion dollars of provisions, and we have a nice healthy overlay," he added, but said he couldn't say this was "done" as the situation "isn't materially improving".

"We're a lot better provided than our peer banks," he added.

Reporting by Iain Withers; Editing by Sinead Cruise and Jan Harvey

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