HSBC to Takeover Failed Taiwanese Bank; Eyes Shanghai Listing

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HSBC Holdings (HBC) will be paid the US$ equivalent of $1.46 billion by Taiwan's government to take over Chinese Bank, a unit of the failed Rebar Group. HSBC plans to invest $300M to $400M of new capital into Chinese Bank to boost its capital ratios. "Chinese Bank will provide HSBC in Taiwan with significant opportunities in retail, commercial and corporate banking," commented HSBC Taiwan CEO Alistair Currie. The acquisition will expand HSBC's number of local branches to 47, from 8 previously. Foreign banks have been active making acquisitions in Taiwan, seeking to tap its citizens' vast accumulation of private wealth. HSBC considers Taiwan a "key component" for its Greater China positioning and for growth across Asia.

Separately, China's state-published Securities Times reported HSBC plans to apply for a listing on the Shanghai Stock Exchange, citing the bank's Asia unit chairman, who ruled out the possibility of listing HSBC's locally incorporated unit. China announced Thursday at the end of strategic talks with Treasury Secretary Paulson's delegation that it will allow qualified companies to sell yuan-denominated shares (full story). Coca-Cola (NYSE:KO) and Siemens (SI) are also said to be considering a listing. London-listed shares of HSBC were last up 0.6% to 835.50 pence in early afternoon trading. HSBC's ADRs lost 1.2% to $85.58 on Thursday.

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