(Bloomberg) -- HSBC Holding Plc slashed its exposure to commercial real estate in both the US and UK last year, the latest sign that lenders are looking to limit their losses as office occupancy rates in major cities continue to plummet. 

The bank’s US commercial property portfolio is now less than half the size it was before the coronavirus pandemic, Chief Executive Officer Noel Quinn said in an interview with Bloomberg Television. Last year, the bank’s exposure to the US market fell 27% to $3.9 billion, the biggest drop of any geography, filings show.

“We’ve been progressively de-risking our portfolio, particularly in commercial real estate in the US,” Quinn said. “We’ve done a similar portion reposition in the UK commercial real estate market.”

Europe’s largest bank reported declines in commercial real estate loans in every market in where it is present, with its Asian portfolio down 12%, the UK exposure down 6% and Middle Eastern property lending down 13%. Overall, HSBC reduced its global property portfolio by 13% last year to $83.6 billion.

“It’s really a function of the post-Covid world,” Quinn said. “The demand for commercial real estate is a lot lower today than it would have been four or five years ago.”

The moves come as investors’ concerns about commercial property values have intensified in recent weeks after New York Community Bancorp slashed its payouts to shareholders and stockpiled reserves to cover troubled loans tied to the sector. Since then, lenders in cities around the world from Frankfurt to Tokyo have signaled strains in their own portfolios. 

The London-based lender’s filing showed that its UK portfolio contains borrowers that are relatively more indebted than their counterparts in Hong Kong. Nearly a fifth of the firm’s UK portfolio has a loan-to-value ratio of greater than 76%, while just 7% of the Hong Kong portfolio has ratios that high. 

Loan-to-value ratios for commercial mortgages typically go as high as 75%, according to broker Charleston Financial.

--With assistance from Francine Lacqua and Neil Callanan.

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