HSBC looks to cash in on Indonesian IPO

HSBC (0005) has started briefing investors on a potential initial public offering of its Indonesian business, two sources said.

Executives at HSBC Indonesia have met with a group of fund managers in Singapore since last week to discuss details of the potential IPO, ahead of an official roadshow, the sources said.

The size of the deal has yet to be determined, and will be dependent on market conditions, they said.

In 2009, HSBC acquired Bank Ekonomi Raharja, an Indonesian bank with a presence across the country. This was merged in 2017 with HSBC Indonesia, the existing local arm of the British bank.

The IPO is mainly to meet a regulatory commitment HSBC made after delisting Ekonomi Raharja following that acquisition and integration.

The IPO, if it materializes, will come against the backdrop of London-headquartered HSBC continuing to push ahead with its expansion in Asia, which accounts for the bulk of its revenues and profits.

The IPO would also come as HSBC faces pressure from China's Ping An Insurance Group (2318), its No 1 shareholder, to explore options including listing its Asia business to boost shareholder returns.

HSBC will decide whether an IPO will be launched before the end of this year in the next few weeks, one of the sources said.

New share sales globally dropped 65.8 percent in the first nine months of the year, based on Refinitiv data, from US$306.8 billion (HK$2.39 trillion) last year to US$104.85 billion, as geopolitical risks and high inflation and rising interest rates have hit investor appetite.

In southeast Asia, IPO proceeds totalled US$6.5 billion in the past nine months, down from US$10 billion in the same period last year, the data showed.

REUTERS