HSBC has recorded a $400 million charge described as "fraud-related," stemming from its exposure to collapsed UK mortgage lender Market Financial Solutions. The charge weighed on the bank's quarterly profits and pushed its share price down more than 7 percent.
The bank disclosed that it had "indirect exposure" through a financial sponsor, which sources familiar with the matter identified as Atlas SP, the asset-backed lending unit of Apollo.
Banks commonly extend financing to private credit firms through lines of credit, referred to in the industry as back leverage. These arrangements give banks indirect exposure to the borrowers of private credit firms and have drawn increasing scrutiny from regulators seeking to map the connections between traditional banking and private credit.
According to insolvency documents, Atlas SP held £1 billion in debt across two of Market Financial Solutions' lending vehicles. The firm has said its net economic exposure amounts to £400 million, a figure that one source said reflects risk transferred to other parties.
A $400 million loss would rank HSBC among the lenders most severely affected by the collapse of Market Financial Solutions. Both Apollo and HSBC declined to comment.
The National Bank of Ukraine imposed enforcement actions against four non-bank financial institutions in April 2026 for violations of legislation on the prevention and counteraction of money laundering.
Three limited liability companies — VFS Ukraine, Tormes-Capital, and FK Capital-Dnipro — were each fined 51,000 hryvnias for violations in the submission of statistical reporting and for failing to deliver financial monitoring reports to the National Bank within prescribed deadlines.
A fourth company, Dila Lombard, received a written warning after failing to submit financial monitoring reporting to the NBU on time.
The National Bank had previously taken enforcement action in March of this year, fining one bank and five non-bank financial institutions for violations in the field of financial monitoring.