HSBC is planning to become one of the first international companies to list on the Shanghai Stock Exchange, it has emerged.
The group is working with the Chinese authorities on the development of listing rules for foreign companies.
It is also understood to have appointed two Chinese banks, China Citic and China International Capital Corporation, to advise it on the listing.
However, it is still too early to put a date or a value on a possible flotation of the group in Shanghai.
The China Securities Commission is expected to change its rules in January to allow foreign companies to list in Shanghai. But it is expected to retain a cap of 20 per cent on the proportion of equity foreign banks can acquire in Chinese financial companies.
Motivation
It is thought the main motivation behind the listing for HSBC, which is well capitalised and does not need the money, is to raise its profile with Chinese retail investors.
The group, which is already the biggest foreign bank in China, has made no secret of its ambitions to expand in the country, through both growing its branch network and buying stakes in existing Chinese banks.
It recently announced that its chief executive Michael Geoghegan was moving from being based in London to Hong Kong, where the group already has a listing.
HSBC was founded in Hong Kong and Shanghai in 1865, but relocated its headquarters to London after acquiring the Midland Bank in 1992.
Hong Kong and China
accounted for 40 per cent of HSBC’s pre-tax profits last year, and analysts have predicted the proportion could grow to 50 per cent over the coming decade.
An HSBC spokesman said: “HSBC’s birthplace in 1865 was in Hong Kong and Shanghai and it is entirely natural that as the leading international bank in China we wish to be among the first foreign companies to list in Shanghai.
“The Chinese authorities will determine how and when this will be possible, and we will work hard to meet all the requirements and obtain the necessary approvals.”
Meanwhile, the bank has entered into an agreement with inurance broker and risk adviser Marsh to buy HSBC Insurance Brokers for £135m of cash and stock. Both have offices in Manchester. The deal is subject to regulatory approvals and is expected to close in the first quarter of next year.
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andy waytomakeacomment, Greater Manchester (21/12/2009 at 20:29)
At the same time Green also insisted that CEO Michael Geoghegan was not "turning his back on London".
Probably so but doesn't change the fact that this doesn't bode well for an industry that constitutes somewhere in the region of 15 per cent of UK GDP, and a major component of the UK stock market. And while this is currently a much-maligned industry, it is one which Greater Manchester and the North West region is a key component of.
HSBC - which hasn't had to borrow any funds as a result of the subprime crisis - knows which side it's bread is buttered, and it has a distinctly Far-Eastern tang to it.