Zhi Tong Cai Jing·2025-10-10 21:36Group 1 - S&P indicates that HSBC's privatization plan for Hang Seng Bank will involve share buybacks at a premium, which will put some pressure on HSBC's capital, but overall capital strength is expected to remain strong [1] - The privatization transaction is expected to be completed in the first half of 2026, leading to a projected reduction in HSBC's risk-adjusted capital (RAC) ratio from 12.6% at the end of 2024 to between 11% and 12% by the end of 2026, still above the 10% threshold set for strong capital assessment [1] - S&P continues to view Hang Seng Bank as a core subsidiary of HSBC, and the planned full ownership will strengthen the ties between Hang Seng Bank and the HSBC Group, reflecting HSBC's long-term commitment to the Hong Kong market [1][2] Group 2 - The privatization plan is expected to enhance governance consistency and facilitate closer business and operational cooperation between HSBC and Hang Seng Bank, allowing for cost efficiencies and better alignment with group strategies [2] - S&P anticipates that the capital pressure resulting from the buyback of all circulating shares of Hang Seng Bank will be manageable for both HSBC and its parent company [2]