LONDON, Feb 23 (Reuters) - HSBC's exposure toGreece totalled some $6 billion at the end of 2014, the Britishbank said on Monday, making it one of the most exposed foreignbanks to the debt-laden nation, despite cutting loans there lastyear.
Most foreign banks have massively cut their exposure toGreece after a restructuring of government debt in 2012, withFrench and German lenders leading the way.
Greece agreed on Friday to extend its financial rescue dealwith Europe for another four months to avert a possible bankingcollapse. But Athens still needs to convince its EU partnersabout its reform plans and Greece might yet have to imposecapital controls or possibly even quit the single currency.
Foreign banks with Greek loans could lose money in such ascenario, potentially from foreign exchange losses if a newcurrency was devalued or any increase in loan losses if theeconomy deteriorated.
HSBC said on Monday its exposure to Greece at the end of2014 mainly consisted of $4 billion of loans and $2 billion ofreverse repo agreements with banks. The bank had reported a netexposure to Greece of $7.3 billion at the end of 2013.
HSBC, which has been in Greece since 1981, said $2 billionof its loan exposure was to the shipping industry anddenominated in U.S. dollars and booked in London, making it lesssensitive to the Greek economy.
Overseas banks had $46 billion of loans to Greece at the endof last September, down from $138 billion in early 2011,according to data from the Bank for International Settlements(BIS), which monitors cross-border lending.
Analysts at JPMorgan said Greek exposure for European bankswas now limited, adding that the main risk from a potential eurozone exit was contagion to other countries, especially Italy.
French banks cut their Greek loans to $1.8 billion at theend of September, from $57 billion in 2011, as Societe Generale and Credit Agricole sold their Greek unitsand lenders sold government bonds, taking big losses.
German banks cut their exposure to $13.5 billion at the endof September from $23.8 billion in 2011, leaving them with thesame exposure as British lenders. Banks from those two countrieshad the most loans to Greece, the BIS data showed.
Royal Bank of Scotland said its balance sheetexposure to Greece was 387 million pounds ($598 million) at theend of 2013, the highest of the major UK banks after HSBC.
The biggest exposure among German lenders is for state-owneddevelopment bank KfW, with lending to the Greek state totalling15 billion euros, banking industry group BdB said in January.
U.S. banks had loans of $10.6 billion at the end ofSeptember. Citigroup last year sold its consumer bankingoperations in Greece, although it kept its corporate andinstitutional banking business there. ($1 = 0.6475 pounds) (Additional reporting by Leigh Thomas and Avik Das; Editing byCrispian Balmer)
HSBC Holdings (HSBA)