Business

HSBC subsidiary announces sale of 10pc stake in Chinese bank

HONG KONG: Hang Seng Bank, a Hong Kong-based subsidiary of British banking giant HSBC, on Tuesday announced the sale of a 10 percent stake in China’s Industrial Bank in a transaction that could be worth $4.74 billion.

The sale will leave Hang Seng Bank with a 0.88 percent holding in Industrial Bank. The move was made in two separate deals, with around half the stake being sold in February and the other half to be sold shortly.

According to an announcement made on Hang Seng Bank’s website, the two transactions will raise a total of up to HK$36.78 billion ($4.74 billion) before expenses.

“Hang Seng Bank and HSBC consider that the transaction represents an opportunity to realise part of Hang Seng Bank’s investment in Industrial Bank, taking into account the current market conditions,” the firms said in the joint announcement.

“Hang Seng Bank expects to use the net sale proceeds of the transaction principally to support future business expansion,” they added.

HSBC, which holds a 62.14 percent stake in Hang Seng Bank, is headquartered in Britain but has strong links to Hong Kong.

It was founded in Hong Kong and Shanghai in 1865, but has been based in Britain since 1992.

The bank recently launched a review on whether to remain headquartered in Britain, however, as the country increases regulation and taxation of the financial sector. -AFP

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