HSBC is considering entering the private credit market to boost its revenue, according to sources familiar with the bank's plans. This initiative comes as HSBC is seeking new revenue streams following a period of restructuring, layoffs, and scaling back its investment banking operations. The bank has engaged in discussions with private credit firms for a potential partnership, although the details of these firms remain undisclosed. However, there is no guarantee that these talks will lead to a formal collaboration.

While some banks have fully embraced private credit, HSBC is cautious about diving headfirst into the sector due to concerns about costs outweighing potential gains, as indicated by senior executives, including CEO Georges Elhedery. Additionally, the impact of President Donald Trump's tariffs has slowed down credit demand temporarily, prompting HSBC to approach the private credit market with prudence.

Banks typically team up with private credit firms to provide loans, with banks earning fees for facilitating the deals and maintaining client relations without putting their own capital at risk. HSBC might not establish a dedicated unit for private credit like some of its competitors have done; instead, it may offer private lending through its existing asset management and life insurance divisions in Hong Kong, sources mentioned.

The planned venture into private credit at HSBC is being overseen by Jamie Markham, the head of credit and capital management, who joined the bank from JPMorgan in February 2023. Private lending has gained momentum globally as banks have reduced their exposure to riskier clients, creating opportunities for collaboration between banks and private credit firms to tap into this growing market.