HSBC vows no layoffs after Hang Seng deal, city’s finance chief says
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HSBC has vowed to invest billions of dollars over the next few years and not conduct any layoffs as part of its proposed deal to take Hang Seng Bank private, said Hong Kong's Financial Secretary Paul Chan.
PHOTO: BLOOMBERG
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HONG KONG - HSBC Holdings has vowed to invest billions of dollars over the next few years and not conduct any layoffs as part of the lender’s proposed deal to take its troubled Hong Kong subsidiary private
HSBC told the government that “substantial investment will be made” in the “billions of dollars” in Hong Kong and the region during its proposed privatisation of Hang Seng Bank, Financial Secretary Paul Chan said in an interview with Bloomberg Television.
The investment will be spent over the next few years in areas like customer services, technology and boosting the private wealth business, he added.
“According to what they have told us, there will be no layoffs,” Mr Chan said.
The US$14 billion (S$18 billion) buyout proposal, announced last week, was a rare big bet by the London-based bank, which has largely avoided such major moves over the past decade.
The proposed deal has been widely seen as a response to Hang Seng’s high levels of bad debt, which HSBC has been pushing the subsidiary to offload. But HSBC chief executive officer Georges Elhedery rejected the connection, saying it is “very much” an investment for growth.
Hang Seng’s credit-impaired loans to the commercial real estate sector rose to HK$25 billion (S$4.2 billion) as at June 2025, up 85 per cent from a year earlier. Even before the proposed privatisation, Mr Chan said he believed Hang Seng’s book fully provided for the provisions irrespective of its loans to commercial-related properties.
As to whether Hang Seng could be sold at some point in the future after its privatisation goes through, Mr Chan said it was a matter for the bank to decide but “this has not been made to us as a plan”.
IPO boom
More than 200 firms are lining up to go public in Hong Kong, adding to a strong year for stock sales in the Asian hub, Mr Chan said, remarking that the initial public offering (IPO) pipeline is “very strong”.
“For mainland companies going global, using Hong Kong as a platform to raise the funds and to employ the talent to help them in their overseas expansion is a very good business proposition.”
Hong Kong has had a banner year for IPOs, as more Chinese firms list in the financial hub, and as stocks rebound from a multi-year slump. Equity sales – comprising IPOs, primary placements and block trades – raised the most in four years in the third quarter, data compiled by Bloomberg shows. The three-month haul exceeded proceeds for all of 2024.
The market’s revived hype has attracted major listings, including battery maker Contemporary Amperex Technology and Chinese miner Zijin Gold International.
Hong Kong stocks have surged since late 2024 after China reiterated support for the city, and as sentiment over China’s economy improves. The benchmark Hang Seng Index has gained 29 per cent in 2025, among the world’s best-performing developed markets.
Global investors are helping to drive the rally, Mr Chan said. Half of the trading is coming from Europe, the United States, Middle East and Asia, with the other half from mainland China, he said.
Bankers’ summit
The Hong Kong Monetary Authority is hosting another summit for global bankers in November. Several bank executives pulled out at the last minute from the inaugural event in 2022 due to Covid-19 and US political pressure to not associate with Beijing and Hong Kong. It will be closely watched to see if geopolitics clouds the attendance in 2025.
At the moment, there are about 100 people at the CEO or chair level who plan to attend, Mr Chan said. “The response so far has been overwhelming,” he added. BLOOMBERG
