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S&P: HSBC's Planned Privatization of HSB to Fortify Ties; Capital Impact Expected to be Manageable
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S&P Global Ratings anticipated that HSBC HOLDINGS (00005.HK)'s announcement of a proposed 30.3% premium privatization of HANG SENG BANK (00011.HK) will further reinforce the ties between the two banks, enhance governance consistency, and promote closer business and operational cooperation. It is estimated that the capital pressure faced by HSBC HOLDINGS due to the repurchase of all outstanding shares of HANG SENG BANK will be within a manageable range.

Within the HSBC HOLDINGS system, HANG SENG BANK is a major local bank in Hong Kong with a strong franchise in the retail and small and midsize enterprise segment, S&P noted. It believed that post-privatization, HANG SENG BANK will continue to operate under its independent brand, reflecting HSBC HOLDINGS' long-term commitment to serving the Hong Kong market. Meanwhile, it is believed that HANG SENG BANK will benefit from more shared resources, leading to improved cost efficiency.

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