HSBC ready for float in Shanghai: CEO

10:28, March 18, 2010      

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HSBC Holdings Plc, Europe's biggest bank by market value, is ready to list its shares on the proposed international board in Shanghai, Chief Executive Officer Michael Geoghegan said on Wednesday.

He said the lender will use the proceeds from the initial public offering (IPO) for investments in China.

"It's a matter for the government to decide when to allow the international floats in Shanghai. HSBC is ready when China is ready," said Geoghegan, who moved to Hong Kong from London recently to increase the lender's focus on emerging markets. He said the bank is yet to appoint advisers for the proposed float.

China plans to set up an international board this year to allow foreign firms to float shares in Shanghai. The move will not only open up more investment channels, but also fuel Shanghai's ambition to become a global financial center by 2020.

The Shanghai bourse has already finished drafting the rules for the international board, and will put them up for public comments soon, Shanghai Stock Exchange Chairman Geng Liang said earlier this month.

Apart from HSBC, Standard Chartered and Bank of East Asia are also keen on listing their shares in Shanghai, according to earlier reports.

Rights plan

The HSBC CEO said the lender was committed to participating in the rights issue of the Bank of Communications (BoCom).

"We have not taken a board position yet... We will announce our decision in due course," he said.

HSBC currently holds an 18.6 percent stake in BoCom, China's fifth largest lender by assets. Last month BoCom said it will raise up to 42 billion yuan through a rights offer in both Hong Kong and Shanghai.

Geoghegan also said that the bank was still keen on entering the securities sector in China.

"It is unusual for HSBC to be in a country where it has a banking presence and does not have securities interests. I think this is the element that we haven't got today (in China)," Geoghegan said, adding that HSBC will discuss the matter with interested parties, without elaborating.

Under the current rules, foreign banks have to form joint ventures with local securities firms and then apply for investment banking licenses.

Other international banks like Deutsche Bank already have securities joint ventures with local brokerages in China.

HSBC, which was founded in Hong Kong and Shanghai in 1865, operates the biggest network among foreign banks in China with 99 outlets in 23 cities. The bank's 100th outlet in China will be opened soon, said Geoghegan.

"Network expansion is an integral part of HSBC's China strategy. In 2010, we shall continue our efforts and hope to provide more services in the mainland," said Richard Yorke, CEO, HSBC China.

The market capitalization of the bank's strategic investments on the mainland has risen to $25.4 billion from $11.3 billion a year back.

Source: China Daily
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