HSBC Reviews Ties to Hedge Funds With Credit Fears on the Rise

HSBC Holdings Plc said it’s reviewing its exposure to smaller banks and hedge funds that have large private credit businesses, as the market comes under scrutiny following the high-profile collapses of First Brands Group and Tricolor Holdings in recent months.

“What is very important in these situations is to consider the second- and third-order risks exposure of other smaller banks or hedge funds that we may be dealing with, and that becomes a primary focus for us,” Pam Kaur, chief financial officer of the British lender, said on a media call Tuesday after the bank announced its earnings.

Kaur ...