HSBC ready for Shanghai listing as firm looks to expand in China

Shanghai : HSBC Holdings Plc, Europe's biggest bank, is ready to list the company's shares on the international board in Shanghai, Chief Executive Officer Michael Geoghegan told reporters in the city.

Proceeds from the listing will be used by the London-based bank to expand in China, where HSBC has already invested more than $5 billion (Dh18.35 billion), Geoghegan, 56, said in China's financial capital. The timing of the listing depends on regulatory approval, he said, reiterating earlier comments.

Geoghegan moved to Hong Kong from London last month and the lender aims for a Shanghai listing to sharpen its focus on Asia. The bank, founded in Hong Kong and Shanghai in 1865, hired China International Capital Corp. and Citic Securities Co. to advise on an offering of more than $5 billion in Shanghai, people familiar with the matter said in August.

"Obviously we are interested when the authorities feel its right to list international companies here in Shanghai," Geoghegan said. "It's a matter for the Chinese government as to when, but HSBC is ready when China is ready."

Drafting rules

Shanghai's bourse is in the process of drafting rules for the international board, where foreign companies will be able to list shares in China, Stock Exchange Chairman Geng Liang said on March 8 in Beijing.

China fully opened its banking industry to overseas companies in December 2006, sparking a rush among foreign banks to add outlets to compete for corporate and household deposits. HSBC, Citigroup Inc. and Standard Chartered Plc are among those that offer yuan-denominated services for consumers in China.

"I am totally satisfied and believe China is absolutely in the right direction to develop its business in the way it should do," Geoghegan said. HSBC will soon open its 100th outlet on the mainland, he said.

Net income

The company owns 18.6 per cent of China's fourth-largest bank by market value, also known as BoCom.

HSBC this month posted 2009 net income of $5.83 billion (Dh21.39 billion), missing analyst estimates, after costs for bad loans rose and profit fell for units in Europe, the Middle East and Asia. Asia will continue to dominate profit at the company, Geoghegan said.

HSBC is exploring ways to build a securities brokerage in China, according to Geoghegan. China's high savings rate is the envy of the world, he said. The banker became CEO of HSBC in May 2006 and has worked outside the UK for most of his career with HSBC. He started the bank's Brazilian unit in 1997 and became head of South American operations in 2000. He also spent eight years in Asia and seven in the Middle East.

HSBC has no plans yet to move Chris Meares, global head of HSBC's private bank, to Hong Kong from London, Geoghegan said yesterday.