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HSBC to raise shares in Bank of Communications

Bank of Communications Ltd said its partner HSBC Holdings Plc applied to the Chinese regulator to raise its stake in the nation's fourth-largest bank by market value to 40 percent.

Bank of Communications and HSBC are seeking a waiver from a rule that caps combined foreign ownership of a financial company at 25 percent, with a single investor holding no more than 20 percent, chairman Jiang Chaoliang (蔣超良) said in Beijing yesterday.

HSBC, Europe's biggest bank by market value, raised its ownership in the Shanghai-based company known as BoCom to 19 percent from 18.6 percent after buying 172.5 million shares on the open market for HK$2.16 billion (US$277 million) on Oct. 23 and Oct. 24.

The London-based bank has said it wants to return its holding in BoCom to 19.9 percent. It also has an option, taking effect August, to increase its stake to 40 percent should Chinese authroities permit.

Bank of Communications may buy into a life insurer or set up an insurance firm by itself, Jiang also said yesterday. The bank is also in talks to buy a stake in some financial institutions in the US and Europe, Jiang said.
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