Xin Lang Cai Jing·2025-10-11 00:37Core Viewpoint - HSBC Holdings and its subsidiaries are planning to privatize Hang Seng Bank at a cash offer of HKD 155 per share, representing a premium of approximately 30.3% over the last trading price, reflecting confidence in the bank's future potential and providing shareholders with an opportunity for immediate liquidity [1][2][3]. Group 1: Privatization Details - HSBC Asia, as the offeror, intends to privatize Hang Seng Bank through a scheme of arrangement, with the cash offer set at HKD 155 per share, which is a premium of about 30.3% compared to the last closing price of HKD 119 [1][2]. - The proposal, if approved, will lead to the cancellation of shares held by minority shareholders and the delisting of Hang Seng Bank from the Hong Kong Stock Exchange [1][2]. - The offer price also represents a premium of approximately 33% over the average closing price of HKD 116.5 over the last 30 trading days prior to the announcement [2]. Group 2: Business Continuity and Brand Preservation - HSBC has stated that after the privatization, Hang Seng Bank will retain its identity as an independent licensed bank, maintaining its corporate governance, brand, market positioning, and branch network [4][5]. - The bank's ongoing community involvement and support for various local projects will continue post-privatization, ensuring that customer interactions remain unchanged [5]. Group 3: Financial Performance and Market Conditions - For the first half of 2025, Hang Seng Bank reported a net operating income of HKD 20.975 billion, a year-on-year increase of 3%, while profit attributable to shareholders decreased by 30.46% to HKD 6.88 billion [5]. - The bank's non-performing loan ratio rose to 6.69%, an increase of 1.37 percentage points compared to the same period in 2024, primarily due to pressures in the commercial real estate sector [6]. - HSBC anticipates that the privatization will enhance earnings per share by eliminating non-controlling interest earnings deductions, while maintaining a target dividend payout ratio of 50% of earnings per share [8]. Group 4: Strategic Importance of Hong Kong - HSBC views the expansion of its business in Hong Kong as a strategic priority, emphasizing the importance of collaboration between HSBC Asia and Hang Seng Bank to leverage their complementary strengths [7]. - The privatization is seen as a significant investment in Hong Kong, reinforcing HSBC's long-term commitment to the region as a leading international financial center [7].