Chong Hing Bank target of possible takeover
Conservative lender confirms it has been approached in what may be the first buyout of a family-owned bank in Hong Kong since 2008
Chong Hing Bank has confirmed it has been approached about a possible takeover, but said it has not received a firm offer.
The bank and its parent company, Liu Chong Hing Investment, made the announcement in a filing to the stock exchange late yesterday after Chong Hing reported a 6.3 per cent year-on-year rise in first-half net profit of HK$276 million.
A Hong Kong-based bank knows about the banking industry in the city and international standards, and a mainland company is familiar with the onshore market
If an agreement is reached, it would be the first acquisition of a Hong Kong family-owned bank since 2008, when China Merchants Bank bought Wing Lung Bank, and it would leave just three major family-owned banks in the city.
Chong Hing Bank, founded in 1948, has been widely seen as a potential takeover target for both mainland and overseas investors wanting to expand into the city's banking industry. Australian bank ANZ considered buying one of the family-owned banks last year. It gave up on the plan because agreement could not be reached on price.
"Chong Hing is a conservative bank with adequate liquidity, which will attract buyers," said BNP analyst Dominic Chan.
Chong Hing's net interest margin, a measure of the profitability of its interest bearing assets, widened to 1.19 per cent in the first half from 1.06 per cent in the same period last year, helping the lender's net interest income increase by 18.8 per cent.
The bank's statement to the stock exchange said the latest approach may or may not lead to a definitive sale agreement.