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izanami
PopStar
Joined: Jan 27, 2004
Posts: 1035
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 Posted:
Aug 07, 2004 - 02:31 AM |
 
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| Post subject: HSBC's stakes in BoCom & ICBC |
Glad to know another foreign lender is getting into China... consumers will benefit from the better variety of banking products, and hopefully, the good practices of one of the most profitable international banking groups around. Does anyone know if Citigroup's holding in Pudong Development Bank is improving its corporate governance and business practices?
HSBC on Friday agreed to pay $1.7bn for a 20 per cent stake in Bank of Communications, China’s fifth largest bank, in a deal that will make it the biggest foreign participant in China's fast-growing banking market.
The move is the most significant acquisition to date by a foreign lender in China and will give HSBC an edge over international rivals.
The deal - first revealed by the Financial Times in May - will be a boost for Shanghai-based Bank of Communications (BoCom) as it will raise capital to clean up its balance sheet ahead of an overseas listing planned for 2005.
A stake in BoCom will enable HSBC to pull ahead of Citigroup among the foreign banks striving to gain a foothold in China.
The US group has a holding in Pudong Development bank but HSBC already owns a stake in Bank of Shanghai and its Hong Kong unit Hang Seng Bank has a 16 per cent cent holding in Industrial Bank of China, one of China’s big four state banks.
The purchase of a stake would virtually guarantee HSBC, whose investment bank has struggled to win mandates in China, an advisory role on BoCom's IPO alongside Goldman Sachs.
The chief attraction for HSBC is BoCom's extensive national network of 2,700 branches, which could be used to market and distribute the London-based lender's products, including the lucrative credit card business.
However, the deal would expose HSBC to the problems of China's troubled banking sector - a legacy of non-performing loans, loan officers unaccustomed to pricing for risk and a sprawling branch network that is difficult to control.
The bank has said it will reduce its non-performing loan ratio from an estimated 12.24 per cent last year to less than 10 per cent. The bank's operating profits in 2003 jumped 34.2 per cent to Rmb9.12bn ($1.1bn). |
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Henry_Chinaski
Board Lord
Joined: Aug 16, 2003
Posts: 5025
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Aug 07, 2004 - 02:26 PM |
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As a customer I hate HSBC. They are dubious, have weak processes that are confuse, prone to error and that demand much more of our time. Their espresso is also crap...too weak. I hate their bureaucracy too.
But you have to admit they are doing all the moves in the right direction. It's excellent for China: hopefully this can create a rush for cheap Chinese assets that will only lead to a reinforced financial system... |
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MaomingMaster
Board Legend
Joined: Feb 03, 2004
Posts: 11059
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Aug 07, 2004 - 04:47 PM |
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^ You don't like HSBC, HC (bloody hell, that's a mouthful...)... I was a customer when I lived in Hong Kong and I thought they were great.
In fact, a mate is trying to convince me to open an account here. He says they're much better than any mainland bank. |
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