31st Jan 2008 09:00
HSBC Holdings PLC31 January 2008 The following is the text of an announcement made today by Hang Seng Bank, a62.14 per cent owned subsidiary of the HSBC Group. HANG SENG SIGNS AGREEMENT TO BECOME LARGEST SHAREHOLDER OF A MAINLAND CITY BANK Hang Seng Bank (Hang Seng) today signed an agreement to subscribe for 20 percent of the enlarged share capital of Yantai City Commercial Bank (Yantai CityBank) in mainland China for a total consideration of RMB800 million (US$103million). Upon successful completion of the share subscription, Hang Seng willbecome the largest shareholder of Yantai City Bank, which serves the rapidlydeveloping Bohai Economic Rim region. The share subscription and the terms of the agreement are subject to theapproval of the China Banking Regulatory Commission, other relevant regulatoryauthorities and shareholders of Yantai City Bank. Hang Seng will have the rightto nominate Directors and to make recommendations for various senior managementpositions, including Vice President and department heads, at Yantai City Bank. The strategic investment in Yantai City Bank will complement Hang Seng'sexisting foothold on the Mainland as the majority of Hang Seng's outlets aresituated in the Pearl River Delta and Yangtze River Delta regions. Followingthis latest investment, Hang Seng's total investment on the Mainland willincrease to about RMB7.3 billion, including the capital injected into its whollyowned subsidiary, Hang Seng Bank (China) Limited, in May last year. Hong Kong-listed Wing Lung Bank will also take a 4.99 per cent stake in YantaiCity Bank, bringing the total foreign shareholding in the Mainland bank to 24.99per cent. Under current Mainland regulations, the maximum aggregate shareholdingby all foreign investors in a domestic bank must not exceed 25 per cent. Today's signing ceremony in Yantai was attended by Mr Zhang Jianting, Mayor ofYantai, Mr Zhang Guangbo, Vice Mayor of Yantai, Mr Zhuang Yonghui, Chairman ofYantai City Commercial Bank, Mr Raymond Or, Vice-Chairman and Chief Executive ofHang Seng Bank and Dr Patrick Wu, Vice-Chairman and Executive Director of WingLung Bank. Mr Zhuang said: "In light of the accelerating pace of reform and opening up ofChina's financial industry, the bringing in of Hang Seng as a strategic investorwill facilitate the sharing of experience, enhance corporate governance andpromote a better business structure. This will help us to achieve internationalstandards and enhance our market competitiveness." "Wing Lung Bank's participation as a financial investor will also enhance boththe shareholding structure and development of Yantai City Commercial Bank," headded. Mr Or said: "This agreement is another milestone in the rapid expansion of HangSeng's business on the Mainland. The Bohai area will join the Pearl River andYangtze River Deltas as a key business region for Hang Seng. Alongside ourorganic growth, we will actively discuss future business cooperationopportunities with Yantai City Commercial Bank." "Our agreement will also benefit the economic development of the Bohai EconomicRim and facilitate the exchange of banking experience and technical expertise,"Mr Or added. Yantai is an international port city in the Bohai Economic Rim region and thesecond-largest industrial city in Shandong Province. Yantai has a very soundeconomic infrastructure. In 2006, the city's GDP grew by 17 per cent to reachRMB240.2 billion. Note to editors Hang Seng BankFounded in 1933, Hang Seng Bank operates around 150 branches and automatedbanking centres and 13 Business Banking Centres in Hong Kong. The Bank alsomaintains a branch in Shenzhen for foreign currency wholesale business, a branchin Macau, and representative offices in Xiamen and Taipei. Established on 28 May 2007, wholly owned subsidiary Hang Seng Bank (China)Limited operates a mainland China network of 23 outlets in Beijing, Shanghai,Guangzhou, Dongguan, Shenzhen, Fuzhou, Nanjing, Hangzhou and Ningbo. With consolidated assets of HK$741.3 billion as at 30 June 2007, Hang Seng Bankreported a profit attributable to shareholders of HK$8,867 million for the firstsix months of 2007 and HK$12.04 billion in 2006. Hang Seng Bank is a principalmember of the HSBC Group, one of the world's largest banking and financialservices organisations. For further information on Hang Seng Bank, please visitthe bank's website at www.hangseng.com. Yantai City Commercial BankFounded in 1997, Yantai City Commercial Bank is the second-largest commercialcity bank in Shandong Province. According to its unaudited financial statements,the Bank had total assets of RMB26.8 billion as at 31 December 2007. It has 68outlets and over 1,200 staff. The bank offers various retail banking servicesincluding deposits, consumer loans and debit card services, as well as tradefinance, remittance and other commercial banking services. For furtherinformation, please visit the bank's website at http://www.ytcb.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HSBC Holdings