Hang Seng Bank is offering almost 5% of Industrial Bank stake to money managers, cutting its holding to less than 0.9%, HSBC said in a statement yesterday.
Bloomberg/Hong Kong
Hang Seng Bank, the Hong Kong lender controlled by HSBC Holdings, will sell a second stake in China’s Industrial Bank Co for as much as $2.7bn as it tries to boost capital.
The company is offering almost 5% of Industrial Bank to money managers, cutting its holding to less than 0.9%, HSBC said in a statement yesterday.
Hang Seng Bank joins global banks including Bank of America Corp and Goldman Sachs Group Inc, which have raised at least $14bn divesting shares in Chinese financial institutions since the start of 2012. The lender sold a 5% stake in Industrial Bank in February for about $2bn as regulators made it more expensive for banks to hold minority investments.
The proceeds from the sale will be used to “support future business expansion” and the lender will “regularly review its remaining shareholding” in Industrial Bank, Hang Seng Bank said in the statement.
Goldman Sachs Gao Hua Securities Co and UBS Securities Ltd are managing the offering of about 950.7mn shares.
The Industrial Bank shares are on sale for 17.68 yuan ($2.8) each, 6% less than yesterday’s closing price of 18.80 yuan.
Industrial Bank has climbed 71% in the past six months, in line with a 76% gain in the Shanghai Composite index. HSBC fell 2.4% to 617.30 pence as of 12:52 pm in London yesterday, paring its gain this year to about 1.8%.
Hang Seng bought 16% of Industrial Bank in December 2003 for HK$1.62bn ($209mn). In January 2013, it reclassified its shares in the bank as a financial investment, reaping a one-time HK$9.5bn accounting gain.
Hang Seng Bank said it will review its remaining stake, taking into account its “planned future business growth, regulatory requirements, market conditions and delivery of sustainable long-term value to shareholders,” HSBC said. The London-based lender owns about 62% of Hang Seng Bank.
