Today’s need-to-know storiesHSBC pulls back from riskier private credit lending
HSBC is pulling back from lending to riskier private credit funds after a series of corporate collapses raised concerns over underwriting standards and banks’ exposure to the sector.
As reported by the FT, the lender has told some clients it will not renew facilities where returns no longer justify the risk, according to three sources familiar with the matter. HSBC will instead focus on lending to lower-risk private credit funds, while continuing to offer other services to the sector.
A person close to the bank told the newspaper that HSBC remained committed to private credit but was “adjusting its risk tolerance to the sector”.
The move follows the collapse of Market Financial Solutions in February, which left HSBC and Barclays facing hundreds of millions of pounds in charges and provisions.
US bankruptcies at Tricolor and First Brands have also raised broader concerns over lending standards in private credit and the risks banks face when they provide funding to the sector.
HSBC told the FT it had “an offering that covers every stage of the private credit market” and remained focused on its most important clients in higher-growth regions.
European IB fees reach strongest first half since 2021
European investment banking fees rose 4 per cent year on year to $16.1bn in the first half of 2026, representing the strongest opening six months since 2021, according to data from London Stock Exchange Group’s latest European IB review.
JPMorgan led the overall European investment banking fee rankings, earning $1.19bn and taking a 7.4 per cent share of the regional fee pool.
Goldman Sachs ranked second with $988.7mn in fees and a 6.1 per cent share, followed by BNP Paribas with $883.6mn and a 5.5 per cent share.
Low valuations and AI investment fuel UK financial M&A boom
The rise in overall fees was supported by record regional debt underwriting fees of $6.2bn, up 3 per cent, and a 62 per cent jump in equity capital markets fees to $1.8bn, representing a five-year high.
Advisory fees from completed mergers and acquisitions climbed 3 per cent to $4.7bn, although syndicated lending fees fell 9 per cent to $3.4bn.
M&A transactions targeting European companies more than doubled in deal value to $679.3bn, with financials the most active target sector.
JPMorgan relaxes working rules during London heatwave
JPMorgan relaxed some of its more strict return-to-office rules for London staff during last month’s heatwave, after record June temperatures in the UK’s capital disrupted schools and public transport.
The US bank, which employs around 13,000 people in the capital, told staff to discuss working-from-home arrangements with managers, according to a Bloomberg report citing a person familiar with the matter.
However, office attendance fell by only 15 per cent, the person said, likely helped by the fact that JPMorgan’s London offices are air-conditioned, unlike most UK homes.
A Citigroup spokesperson told Bloomberg that its hybrid working model worked well in London during the heatwave.
Meanwhile in Paris, staff at banks including Société Générale, BNP Paribas and Crédit Agricole were allowed more flexible working arrangements as temperatures reached 40C.
Bloomberg said JPMorgan declined to comment on its London working arrangements.
World Bank forecasts China growth to slow to 4.4%
China’s growth is projected to slow to 4.4 per cent this year, dragged down by the embattled property sector and sluggish consumer demand, according to the World Bank.
The biggest impact of weak demand was offset in the second quarter by policy support, tech investment and buffers against the recent global energy shock.
The China Economic Update: Rebalancing Growth report notes that risks to the country’s outlook are broadly balanced, with uncertainty over oil and gas supplies having declined. Further property downturns could put additional pressure on consumer spending and investment in real estate.
However, the bank acknowledges there is the possibility that growth could exceed expectations if fiscal stimulus and AI-related investments prove to be stronger than expected.
“Further strengthening the social safety net would be a key measure to boost consumption. Raising benefit levels, extending coverage to informal workers, and providing access based on residence could give households the confidence to spend more rather than save,” said Tatiana Rosito, division director for China, Mongolia and Korea at the World Bank.
The World Bank forecasts China’s growth will further diminish to 4.3 per cent in 2027.
Wall Street giants consider Fiserv purchase
JPMorgan, Bank of America, Wells Fargo and PNC Financial Services are among the Wall Street banks said to have held early-stage talks about purchasing a debit card processing network from US technology company Fiserv.
As reported by the Wall Street Journal, the discussions come as large US lenders seek to strengthen their payments businesses after Capital One Financial’s $50.6bn acquisition of Discover Financial gave it more control over how card payments are processed with merchants.
An acquisition by the group of banks could help them bypass the impact of the Durbin Amendment, part of the 2010 Dodd-Frank Act, which caps debit card interchange fees for financial institutions with at least $10bn in assets.
A source told the newspaper that no deal was certain and that talks could still fall apart.
Some of the banks involved in discussions with Fiserv had already decided they were unlikely to proceed, the source added, citing concerns that an acquisition could trigger a backlash from US lawmakers, regulators and merchants.
Indonesia could waive income tax for foreign bankers
Indonesia is mulling a zero per cent income tax for foreign finance experts as part of its International Financial Centre proposals.
During a discussion at a public hearing on Monday between the country’s lawmakers and legal experts, it was suggested the zone would offer a 100 per cent corporate income tax reduction for businesses in the centre, with a full income tax break for foreign financial sector experts.
International employees holding Golden Visas — which give individuals defined as “talented” residency status for five to 10 years and exempt them from applying for standard limited-stay permits — may not be treated as domestic tax residents.
Businesses located in the proposed hub, which is potentially to be based in Bali, will be barred from raising public funds or transacting with domestic customers located outside the ringfence.
The hub is the latest attempt by President Prabowo Subianto to bring in capital to support the country’s ambitious economic growth plans.