HSBC's stake purchase deal goes smoothly
(Xinhua)
Updated: 2004-08-03 09:42

HSBC's deal to acquire 19.9 percent of Bank of Communications in Chinese mainland goes smoothly, said John Bond, group chairman of HSBC Holding Monday.

"Those discussions (to acquire 19.9 percent of Bank of Communications) have gone well and we have now reached agreement in principle on the terms of our investment. We expect to make a further announcement shortly," he told reporters when disclosing HSBC Holding's 2004 interim results.

Business alignment between the commercial banking teams in Hong Kong and China's mainland resulted in substantial growth in the number of mutual business referrals between the two areas.

The group announced its operating income up 35 percent to US$25,028 million, with attributable profit up 55 percent to US$6,346 million, well beyond market expectation.

This absolute level of profits was the highest HSBC Holdings ever achieved in a six month period.

John contributed the solid performance to domestic as well as US economic recovery. "Hong Kong's economy achieved a significantly higher rate of growth, buoyed by rising business and consumer confidence and by measures taken by the authorities to allow increased tourism from Chinese mainlined," he said. The improved property market and employment levels and other factors show positive effect on the company's performance.

However, he said "it would be unwise to relax" because of global imbalances, and the rising risk of market disruptions.

Hang Seng Bank, one of the member banks of HSBC also announced performance for the first half of 2004. Compared with the first half of 2003, attributable profit increased by HK$1,223 million (US$156.8 million), or 24.4 percent, to HK$6,245 million (US$800 million).

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