HSBC takes action, HANG SENG BANK will be privatized and delisted, with a market value exceeding 250 billion yuan! The Hang Seng Index will no longer include HANG SENG BANK

On the evening of January 8, HSBC Holdings (HK00005) and HANG SENG BANK (HK00011) disclosed a joint announcement on the Hong Kong Stock Exchange, announcing that HSBC's plan to privatize HANG SENG BANK was approved at the court meeting and shareholders' meeting held on the same day. After obtaining approval from the High Court of Hong Kong and meeting relevant conditions, the privatization plan for HANG SENG BANK will take effect on January 26, 2026, and is expected to be delisted from the Hong Kong Stock Exchange on January 27. This means that HANG SENG BANK, which has been listed since 1972, may end its 53-year public trading history and become a wholly-owned subsidiary of HSBC Holdings. The reporter noted that HANG SENG BANK will also be removed from relevant index constituents. The Hang Seng Index Company stated on December 30 last year that if the privatization proposal for HANG SENG BANK is approved, the stock will be removed from multiple indices and sub-indices, including the Hang Seng Index and the Hang Seng Composite Index, after the market closes on January 14, 2026. It is worth noting that the Hang Seng Index of the Hong Kong stock market is compiled and managed by HANG SENG BANK's wholly-owned subsidiary, Hang Seng Indexes Company Limited. Privatization Plan Approved by High Votes On October 9, 2025, a joint announcement publicly disclosed HSBC's plan to privatize HANG SENG BANK. HSBC Asia Pacific, as the offeror, proposed a cash consideration of HKD 155 per share for the privatization. If the plan takes effect, HSBC Asia Pacific will need to pay a total cash amount of approximately HKD 106.156 billion to the shareholders involved in the plan. The announcement on the evening of January 8 showed that HSBC's plan to privatize HANG SENG BANK was approved at the court meeting and shareholders' meeting of HANG SENG BANK. At the court meeting, approximately 237 million shares held by plan shareholders (about 85.75% of the voting rights) voted in favor, while 39.3 million shares voted against (about 14.25% of the voting rights); at the shareholders' meeting, the special resolution related to privatization received a 97.30% approval rate. According to the announcement, before the plan becomes binding and effective, it is expected that the listing status of HANG SENG BANK shares on the Hong Kong Stock Exchange will be revoked at 4:00 PM on January 27, 2026 (Tuesday). The expected deadline for trading HANG SENG BANK shares on the Hong Kong Stock Exchange is 4:10 PM on January 14, 2026 (Wednesday). Additionally, according to the announcement, to determine the eligible plan shareholders entitled to the consideration rights under the plan, HANG SENG BANK will suspend the handling of share transfer registration procedures starting from January 20, 2026 (Tuesday), during which no share transfer registration for HANG SENG BANK will be processed. As of the market close on January 9, HANG SENG BANK's stock price closed at HKD 154.3, only less than HKD 1 away from the previously disclosed acquisition price of HKD 155, with a total market value of HKD 289 billion (approximately RMB 258.8 billion) HANG SENG BANK brand, branch network, etc. will be retained Regarding why HSBC wants to privatize HANG SENG BANK, there are voices in the market suggesting it may be related to the latter's real estate bad debts in recent years. According to HANG SENG BANK's mid-2025 report, as of the end of June 2025, the bank has made credit impairments on Hong Kong commercial real estate loans amounting to HKD 25.012 billion, an increase of HKD 5.2 billion compared to six months ago, representing a growth of 26%. Loans classified as "Stage 2" increased from HKD 29.438 billion at the end of 2024 to HKD 66.851 billion. It is reported that "Stage 2" refers to assets with significantly increased credit risk, which require the recognition of expected credit losses over the entire cycle. In response to various viewpoints, HSBC CEO Noel Quinn has previously stated that the initiative is purely a commercial decision based on strategic considerations, and the privatization demonstrates the bank's confidence in Hong Kong's prospects, representing an investment to promote growth, unrelated to the bad debt situation. It is reported that after this privatization, HANG SENG BANK will retain its licensed bank recognition granted independently under Hong Kong banking regulations and maintain independent corporate governance, brand image, unique market positioning, and branch network. Risk warning and disclaimer The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at their own risk