HKCB preens ahead of likely banking sector consolidation

Hongkong Chinese Bank (HKCB) fits the bill as the perfect takeover target for a larger lender wanting to expand in the SAR, according to managing director and chief executive Raymond Lee.

Mr Lee yesterday stopped short of inviting bids for the bank, but he emphasised that major shareholders would consider any reasonable offer made for their controlling stake.

'We obviously seem to have the right profile to be a potential takeover target,' he said.

'I would characterise that profile as first of all having institutional investors who, in some ways, are easier to deal with than family shareholders because this is purely a business investment and there are no sentimental reasons.'

Mr Lee also said the bank's small size would make it easier for a buyer to put together an offer.

'Plus, at one point we were trading below book, which would tend to make people believe they could perhaps acquire the bank at a cheap price - though obviously these are all perceptions and I do not believe our major shareholders would be prepared to divest at a price which they do not feel is at an appropriate level,' he said.

HKCB, capitalised at HK$5.03 billion, is Hong Kong's fourth-smallest listed bank after ICBC, HK$3.02 billion; International Bank of Asia, HK$2.35 billion; and Liu Chong Hing Bank, HK$1.88 billion.