HSBC (Hong Kong Shanghai Bank Corp) has been dealt a major blow to its expansion plans in China. Its main domestic partner, Chinese lender Bank of Communications, has been reclassified as a large state-owned bank, which protects it from a foreign takeover.
Three years ago, HSBC paid $1.75 billion for a nearly 20% stake in the bank — the largest stake allowed under Chinese rules at the time. The agreement included a clause that would allow HSBC to increase its share to 40% when the government raised foreign investment limits. But now the chance for a larger ownership position is unlikely, as government officials have stressed they won’t allow banks classified as large state-owned banks to be controlled by foreign financial institutions.
If Hong Kong Shanghai Bank Corp makes our readers think this might be a different HSBC than the London based outfit that claims to be ‘The worlds local bank’ – think again. Now you know what HSBC stands for, both in the United States and around the world. Are you facing foreclosure or eviction by HSBC Finance Corporation? They were once called Household International, the world’s most famous predatory lender. And now you know the rest of the story, so to speak.