Is HSBC Beginning to Regret Betting the Bank on China?

In late August ICBC said that its non-performing loans to real estate companies almost doubled in the first half of the year, while troubled loans to the sector at China Construction Bank jumped by 28 percent. China Merchants Bank recorded an almost four-fold jump in bad loans to real estate. Over the course of the last five or so years HSBC has bet the bank on China's fast-growth economy while staging a strategic retreat from other markets. As geopolitical tensions have escalated between the US and China, HSBC has had to walk a tightrope in its relations with China on the one hand and Washington and London on the other. China still hasn't fully forgiven HSBC for ratting out Chinese telecom giant Huawei to the U.S. Department of Justice for breaching U.S. sanctions on Iran. Another potential problem HSBC has in China is that it plans to target the country's newly affluent, at a time that Beijing is. In recent months Beijing has expressed its displeasure with the bank by allegedly ceasing one-on-one meetings with senior HSBC bankers as well as sidelining HSBC's investment banking operations in China.