Two HSBC financial institution logos are displayed on an workplace constructing in Mexico Metropolis, Mexico, July 25, 2025.
Henry Romero | Reuters
Dangle Seng Financial institution shares jumped 29.5% Thursday after mother or father HSBC introduced plans to take it non-public, valuing the lender at greater than 290 billion Hong Kong {dollars} (over $37 billion).
HSBC, Europe’s largest lender, has requested Dangle Seng Financial institution’s board to place ahead a privatization proposal to shareholders through a scheme of association underneath Hong Kong’s Corporations Ordinance.
Shares in Dangle Seng Financial institution can be canceled in trade for 155 Hong Kong {dollars} apiece, roughly 33% above Dangle Seng’s common share worth over the previous 30 days of HK$116.5. HSBC owns round 63% of Dangle Seng Financial institution, pegging the deal worth at HK$106 billion.
HSBC shares in Hong Kong fell over 5%.
“Our provide is an thrilling alternative to develop each Dangle Seng and HSBC,” stated Group Chief Govt Georges Elhedery. “We’ll protect Dangle Seng’s model, heritage and buyer proposition whereas investing to unlock new strengths in merchandise, companies and expertise.”
He added that the deal underscores HSBC’s confidence in Hong Kong’s position as a number one world monetary middle and as a “super-connector” between worldwide markets and mainland China.
The provide permits for changes reflecting any dividends declared after the announcement date, besides Dangle Seng’s third interim dividend for 2025.
“One in every of HSBC’s strategic priorities is to develop in Hong Kong,” the financial institution stated in its submitting assertion, including that it believes it’s “finest positioned” to take action by strengthening the Hong Kong banking presence of each HSBC Asia Pacific and Dangle Seng Financial institution.
Dangle Seng Financial institution is a core regional unit for London-based HSBC, with a considerable presence within the Hong Kong banking trade.
“Father or mother-subsidiary double listings are inherently problematic when it comes to governance and on this sense it is a optimistic and long-overdue transfer,” stated Michael Makdad, senior analyst at Morningstar.
Dangle Seng Financial institution has seen an uptick in dangerous loans in recent times, tied to its focus within the Hong Kong and mainland China’s embattled actual property sectors.
In its 2025 first-half outcomes, the financial institution acknowledged that non-performing loans reached 6.69% of whole loans and advances to clients, “primarily as a consequence of ongoing credit score strain within the property sector.” That is up from 6.12% as of Dec. 31, 2024, and 5.32% as of June 30, 2024.