HSBC eyes BoCom rights issue subscription
Move part of HSBC's plans to invest in China to capitalise on country’s 10.7% economic growth.
HSBC Holdings PLC (HBC) said Wednesday it will likely subscribe to the CNY42 billion ($6.1 billion) rights issue by its mainland China partner Bank of Communications Co. as part of its investment plans in the country.
HSBC is also working toward being one of the mainland's first foreign-listed companies to tap into the country's huge liquidity and help raise its profile there, said Chief Executive Michael Geoghegan.
The banking giant has been one of the more active foreign lenders in China, attracted by the highest savings ratio in the world and a resilient economy amid the fallout from the global financial crisis, with strong economic growth of 10.7% in the fourth quarter.
"China's absolutely on the right direction to developing its business in the way it should do," Geoghegan said. "I'm satisfied and confident about HSBC's operation as when China continues growth, the company will keep growth."
On the bank's initial public offering plans, he said: "We are working through that with our advisers and when the time comes we will announce it." The bank would use the proceeds from the IPO to finance its China expansion, Geoghegan added, but declined to give further details.
View the full story in the Wall Street Journal.
