HSBC is spending $13.6 billion to buy the remaining 37% stake in Hang Seng Bank, taking full ownership
The post HSBC is spending $13.6 billion to buy the remaining 37% stake in Hang Seng Bank, taking full ownership appeared on BitcoinEthereumNews.com.
The Hongkong and Shanghai Banking Corporation, better known as HSBC, has announced that it will purchase the remaining 37% stake in Hang Seng Bank for $13.6 billion, taking full control of the lender. “This is an investment for growth, for the medium to long term in what is a leading local bank in Hong Kong,” HSBC CEO Georges Elhedery said after the announcement. Over the past year, he shut down its investment banking operations in Europe and the United States, exited retail markets in France and Argentina, and restructured the group to focus on two core regions, the UK and Hong Kong. In 2024, the bank earned $9.1 billion in pre-tax profit from Hong Kong, meaning 28% of its total, compared with $6.6 billion from the UK. HSBC consolidates Hong Kong operations Analysts have described the takeover as a “long overdue simplification” of the bank’s structure in its most profitable market. HSBC first bought a controlling stake in Hang Seng Bank in 1965 when a banking crisis hit Hong Kong. That cemented its position as a dominant local player, and this latest step is seen as an extension of that legacy. S&P Global analysts said, “Hong Kong has long been HSBC Holdings’ most profitable home market. We view the proposed transaction as a strategic redeployment of the substantial excess capital it is generating.” HSBC plans to use its surplus capital to privatize Hang Seng completely, which will eliminate the ‘minority-interest deduction’ — an accounting adjustment that reduced HSBC’s capital buffer because it didn’t fully own the Hong Kong lender. Georges said, “The ability to scale investments across both brands across the international network will be enhanced through this alignment. And it is more value generative for our shareholders than a share buyback.” However, not everyone was impressed. HSBC’s shares dropped…
