HSBC Holdings Plc, founded in Hong Kong and Shanghai in 1865, said it reached an agreement to buy a stake in Bank of Communications (交通銀行), the biggest acquisition yet by an overseas lender in China.
HSBC, Europe's biggest bank by market value, which already owns shares in the Bank of Shanghai (上海銀行) and Ping An Insurance Co (平安保險) in China, said it will announce the purchase shortly.
London-based HSBC announced last month that it was conducting talks to buy a 19.9 percent stake in the Chinese lender. It didn't say how much it will pay or whether it had received government approval.
HSBC Chairman Sir John Bond spent US$46 billion on US and European takeovers in the past five years, adding more than 70 million customers and making the bank the world's sixth-largest credit card issuer.
"This is their most significant deal in China," said Ambrose Chang, who manages US$1.7 billion as the chief investment officer at Daiwa SB Investments HK Ltd in Hong Kong, including shares of HSBC.
"This is a big move in the Chinese banking sector and the biggest investment move by HSBC in a still closed banking system," Chang said.
HSBC, Citigroup Inc and other overseas banks are jostling for position in China, where 1.3 billion people have US$1.35 trillion in savings and the government is opening up the market to competition.
"We're in discussions with the Bank of Communications," said HSBC's Chief Executive Stephen Green.
"Those discussions have gone well. We have reached an agreement in principle and expect to make an announcement shortly," he said.
HSBC said yesterday that its profit in the first half of the year advanced 55 percent, helped by the US$15.5 billion purchase of Household International Inc. Net income increased to US$6.35 billion from US$4.1 billion in the same period a year ago.
Banks worldwide are targeting Chinese lending, credit card, insurance and fund management services as the nation prepares to lift curbs on lenders in line with WTO rules.
When China joined the trade body in December 2001, it agreed to lift restrictions on overseas banks conducting local currency business with individuals by the end of 2006.
HSBC said profit from its China operations more than doubled last year to 324.7 million yuan (US$39.2 million) from a year earlier, as it increased lending and took more deposits.
"It will also ring the bell for other foreign investors to link up with Chinese banks," Chang said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS