UPDATE: HSBC Aims To Raise 'Significant Amount' From China IPO

9th Jun 2010 06:14

(Adds more comments from HSBC executives on network expansion and securities partnership.) SHANGHAI (Dow Jones)--HSBC Holdings PLC (HBC) said Wednesday it expects to raise "a significant amount" of funds from its planned listing in Shanghai to facilitate its expansion in China, where the U.K.-based lender is seeking to strengthen its presence and form a securities venture. The bank, which has the largest network of any international bank in China, opened its 100th outlet in the country on Wednesday. It aims to tap ample liquidity in the world's third-largest economy and is working toward becoming one of the first foreign companies to list in China when regulations allow. "As the rules haven't been published, it will be difficult to say how much we will raise from China, but I'd say it would be a significant amount," HSBC Group Chief Executive Michael Geoghegan said at the launch of the bank's new China head office in Shanghai. He didn't specify the fund-raising target, and said the timing of the deal is contingent on changes to China's listing rules. Foreign companies aren't allowed to list on Chinese stock exchanges, but analysts said the securities regulator will likely ease listing rules. "If we do a listing here in China, we have said that that money would be for China and for Greater China," said Geoghegan, who relocated to Hong Kong from London in January, highlighting the importance HSBC places on Asia. People familiar with the situation told Dow Jones Newswires last year that the U.K. lender has mandated China International Capital Corp. and Citic Securities Co. as bookrunners on its planned yuan-denominated Shanghai initial public offering that could raise as much as US$5 billion. HSBC was one of the first foreign banks to locally incorporate its operations in mainland China in April 2007, and has 100 branches across 23 cities in the country. Local incorporation is a prerequisite for foreign lenders to take part in all local-currency businesses. "We will take every opportunity to continue to expand our network," said Helen Wong, HSBC China's newly appointed Chief Executive designate. "When we locally incorporated (our operations in China) we had 35 outlets--now we have 100. I can't give the timing when we will reach 200, but we will try to continue to expand at a similar pace," she said. In addition, HSBC is interested in forming a securities joint venture in China, said HSBC Asia-Pacific Chief Executive Peter Wong. "We are very interested in having a partnership in securities, we continue to look for partners," Wong said, without elaborating. A person familiar with the situation said in August HSBC was in advanced talks to set up an investment banking joint venture with Fujian province-based brokerage Industrial Securities Co. In the past decade, HSBC has invested more than US$5 billion in mainland China, including CNY8 billion worth of registered capital in HSBC China; a 19% stake in Bank of Communications Co. (3328.HK), China's fifth-largest lender by assets; a 16.7% holding in Ping An Insurance (Group) Co. of China Ltd. (2318.HK); and an 8% interest in Bank of Shanghai Co. HSBC is also seeking regulatory approval to set up a credit-card joint venture with Bank of Communications. -Rose Yu contributed to this article, Dow Jones Newswires; 8621 6120-1200; [email protected] (END) Dow Jones Newswires June 09, 2010 01:14 ET (05:14 GMT)