Weekly Global News Wrap: HSBC may receive just $21.7m from Russia sale; 282 US banks at risk

And Japan’s small businesses, homeowners brace for life after the interest rate policy shift.

From Reuters:
HSBC’s sale of its Russian unit to Expobank may just produce $21.77m (roughly 2 billion roubles), according to Russian financial news outlet Frank Media.

The transaction will represent a 90% discount. 

Russian President Vladimir Putin gave approval last month for HSBC's asset sale to privately-owned Expobank to go ahead.

From CNBC:
Of about 4,000 US banks analyzed by consulting firm Klaros Group, 282 institutions with nearly $900b total assets are at risk of needing capital.

These institutions have both high levels of commercial real estate exposure and large unrealized losses from the rate surge — a potentially toxic combo that may force these lenders to raise fresh capital or engage in mergers. 

The study, based on regulatory filings known as call reports, screened for two factors: Banks where commercial real estate loans made up over 300% of capital, and firms where unrealized losses on bonds and loans pushed capital levels below 4%.

ALSO READ: How have banks’ wealth management pivots played out?

From Reuters:
In the coming years, Satoaki Kanoh needs to replace almost a dozen ageing machines at his Tokyo-based maker of acrylic panels, a major undertaking that he worries will become even more expensive.

"Ideally, I'd like to do one a year. But I don't have that much money," Kanoh said of the customised pieces of machinery that cost around JPY50m ($330,000) apiece.

"If we have to pay a lot to borrow, we could end up in a really tough spot." He added, expressing worries about the potential pace of rate increases. Too much too quickly and Japan won't be able to adapt, he said.

Millions of Japanese, from small business owners like Kanoh to first-time homebuyers, are sizing up how to adapt to higher borrowing costs after the long, lean years of deflation, when prices, wages and the cost of money changed little.

Small and medium-sized companies employ some 70% of the workforce and private consumption accounts for more than half of the gross domestic product.