Hang Seng Bank shares jump 30% on parent HSBC’s privatization bid, valuing it at over $37 billion

Hang Seng Bank shares rose 29.5 percent on Thursday after parent company HSBC announced plans to privatize the bank, valuing it at more than 290 billion Hong Kong dollars (more than $37 billion).

HSBC he asked Hang Seng Bank’s board of directors will submit a privatization proposal to shareholders through a regulation under the Hong Kong Companies Ordinance.

Shares in Hang Seng Bank will be canceled for 155 Hong Kong dollars per piece; This is roughly 33% above Hang Seng’s average share price of HK$116.5 over the past 30 days. Owner of HSBC about 63% Hang Seng Bank pegged the deal value at HK$106 billion.

HSBC’s shares in Hong Kong fell more than 5 percent.

“Our offer is an exciting opportunity to grow both Hang Seng and HSBC,” said Group Chief Executive Georges Elhedery. “We will preserve Hang Seng’s brand, legacy and customer proposition while investing to unlock new strengths in products, services and technology.”

He added that the deal underlines HSBC’s confidence in Hong Kong’s role as a leading global financial center and “super connector” between international markets and mainland China.

The proposal allows adjustments reflecting dividends declared after the announcement date, with the exception of Hang Seng’s third interim dividend for 2025.

“One of HSBC’s strategic priorities is to grow in Hong Kong,” the bank said in its filing, adding that it believes both HSBC Asia Pacific and Hang Seng Bank are “best positioned” to do this by strengthening their Hong Kong banking presence.

Hang Seng Bank is the principal regional unit of London-based HSBC and has a significant presence in the Hong Kong banking sector.

“Parent-subsidiary dual listings are inherently problematic from management’s perspective, and in that sense, it’s a positive and overdue move,” said Michael Makdad, senior analyst at Morningstar.

Hang Seng Bank has seen a rise in bad loans in recent years due to its concentration in Hong Kong and mainland China’s struggling real estate sectors.

in 2025 The bank stated that, according to the first half results, non-performing loans reached 6.69% of the total loans and advances given to customers, “especially due to the ongoing credit pressure in the real estate sector”. This rate increased compared to 6.12% as of December 31, 2024 and 5.32% as of June 30, 2024.