HSBC (0005) described its proposed HK$106 billion privatization of Hang Seng Bank (0011) as "highly compelling," emphasizing its strategy to invest in markets where it holds competitive advantages.
The banking giant recently announced a plan to acquire the remaining shares of Hang Seng Bank for HK$155 per share.
During an earnings call, group chief financial Officer Pam Kaur stated that HSBC aims to direct investments into areas where it holds strong competitive positions.
She highlighted the group’s deep understanding of the Hong Kong market and Hang Seng Bank, characterizing the privatization as a very attractive opportunity.
When questioned on whether the offer price was too high, Kaur explained that the move aligns with the group's strategic shift towards growth investments.
She asserted that the buyout is intended to develop the bank's business and that the terms are fair and appealing to all parties involved.
Given the market opportunities presented by the privatization and the interests of minority shareholders, she confirmed the price is appropriate and will not be revised.
Following the departure of former Chairman Mark Tucker at the end of September, the position of group chairman has remained vacant. Kaur noted that independent non-executive director and group monitoring committee chairman, Brendan Nelson, is serving as interim group chairman.
She described him as a seasoned board member with whom collaboration has been positive over the years and mentioned that the process for selecting a new chairman is ongoing, with updates to be announced in due course.
The group forecasts a tangible return on equity of about 15 percent or higher for the year, excluding significant items. It also expects net interest income from its banking business to reach US$43 billion (HK$335.4 billion) in 2023, up from the US$42 billion projection made in June.
Kaur expressed satisfaction with the group's performance, leading to the upgraded guidance. She added that while the group is typically conservative, the raised outlook reflects strong confidence in its current operations and future prospects.
