HONG KONG/SINGAPORE (Aug 1): HSBC Holdings plc has said it will take further charges against its more than US$12 billion of exposure to China commercial real estate as a third of those assets are "substandard" or "impaired", according to chief financial officer Ewen Stevenson.

"There is really only one portfolio globally that we are paying close attention to. That is the offshore book of our China commercial real estate exposure," Stevenson said in an interview with Bloomberg Television on Monday. "We are some quarters away from saying we are through the worst of it."

HSBC took US$142 million of expected credit losses related to China's commercial real estate sector in the second quarter. That added to a US$160 million charge set aside in the first quarter.

China's deepening real estate crisis has roiled Asian credit markets, hit the nation's 400 million middle class, and ensnared not only local lenders but also global banks including HSBC and Standard Chartered plc. The nation's top 100 developers saw home sales slump further in July, indicating a mortgage boycott crisis across more than 90 cities has further weighed on buyer confidence as authorities struggle to contain the turmoil.

In a worst-case scenario, S&P Global Ratings estimated that 2.4 trillion yuan (US$356 billion), or 6.4% of mortgages, are at risk while Deutsche Bank AG is warning that at least 7% of home loans are in danger.

Stevenson said in a separate interview that HSBC does not have "significant" exposure to any of the unfinished properties that have sparked the nationwide boycotts. He also added that as a percentage of its overall book, China commercial real estate is "very modest" and manageable.