Hang Seng Bank shareholders set to back HSBC’s privatisation plan amid bad debt concerns

Hong Kong’s banking sector is set for a landmark transformation as thousands of Hang Seng Bank shareholders vote on HSBC Holdings’ bid to take the lender private on Thursday morning.

Analysts expected an overwhelming approval for the proposal, which offers shareholders HK$155 a share – 30 per cent higher than Hang Seng Bank’s HK$119 closing price on the last trading day before the announcement on October 9. Since then, HSBC has risen 15 per cent to close at HK$127.20 on Wednesday, on the eve of the vote, while Hang Seng Bank has edged up 29 per cent to HK$153.80.

“I believe the chance for a successful privatisation deal is sky-high,” said Mike Leung Kit-man, director of Wocom Securities. “Given that Hong Kong’s commercial real estate market remains sluggish, being able to sell shares at this price is unlikely to face much opposition from Hang Seng’s shareholders.”

The privatisation proposal aimed to unlock greater synergies between the two banks through continued investment in technology, talent and risk management, said Peter Wong Tung-shun, chairman of HSBC Asia Pacific, in a written reply to the Post.