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HSBC's proposal to take Hang Seng Bank private by acquiring minority-held shares has received key internal approval. An independent committee of Hang Seng's board has assessed the USD 13.6 billion offer and advised minority shareholders to support the transaction. The move comes at a time when Hang Seng is facing sustained pressure from its exposure to the Hong Kong and mainland China property markets. With bond repayments for property developers expected to rise sharply next year, the transaction reflects HSBC's broader strategy of reshaping its Asian banking operations.
Hang Seng Bank has said its independent board committee has reviewed HSBC's buyout proposal and concluded that the offer is fair and reasonable. The committee has recommended that minority shareholders vote in favour of the deal, which would see HSBC take the bank private. Advertisement
Under the proposal, HSBC plans to acquire the remaining 36.5% stake in Hang Seng Bank that it does not already own, valuing the transaction at around USD 13.6 billion. HSBC is already the controlling shareholder and the transaction would consolidate full ownership of one of Hong Kong's best-known lenders.
When the offer was announced, HSBC's chief executive Georges Elhedery had indicated that the group was pursuing targeted acquisitions to strengthen key businesses while continuing to exit non-core assets. The Hang Seng deal fits into this broader strategy as HSBC refocuses on markets where it sees long-term growth and operational synergies.
Hang Seng Bank has faced mounting challenges in recent years due to its relatively high exposure to the Hong Kong and mainland China property sectors. The prolonged slowdown in real estate, coupled with weak developer balance sheets, has weighed on asset quality and earnings visibility for lenders with significant property-linked portfolios.
Pressure on the sector is expected to intensify further as bond maturities for heavily indebted Hong Kong property developers are projected to rise by nearly 70% next year. This is likely to strain both developers and their creditors, keeping risks elevated for banks with large real estate exposure.
Established in 1933, Hang Seng Bank is among Hong Kong's largest banks and remains a core part of the HSBC group. It serves close to 4 million customers through a mix of digital platforms and more than 250 branches across the city, maintaining a strong retail and commercial banking presence.
Source Reuters
5th Jun, 2025
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