HSBC is reported to examine for an initial public offering (IPO) of its Indonesian business to tap buoyant investor demand in the world’s fourth-most populous country.
It has yet to file a formal IPO application but the local regulator is aware of its intention. Plans for a share sale in Jakarta are at an advanced stage, according to sources.
HSBC is reported to pivot its focus to Asia, shifting billions of dollars in capital and making fresh investments as it sells off and scales back unprofitable businesses in other regions. Indonesia, with the largest population in Southeast Asia, is seen as a strategic market as the economy has been gathering pace after emerging relatively unscathed from its latest virus wave, with the government predicting economic growth of 4.8 to 5.5 percent this year.
To recap, the bank is also fending off a push by its largest shareholder – China’s Ping An Insurance – to spin off the Asian operations in a bid to improve returns.
In 2008, HSBC initially bought 88.9 percent of PT Bank Ekonomi Raharja for US$607.5 million, a move that almost doubled its branch network across Indonesia.
HSBC offers services in commercial banking, investment banking, wealth and personal banking. With 69 branches in 24 cities in 2020, according to its annual report. While in last year, the banking group has more than 3,000 employees, booked a profit before tax of about US$129 million.
The bank has operations across 64 countries including Hong Kong, China, Singapore, India and Malaysia. Asia, where Meanwhile approximately half of its 220,000 employees are based in Asia, where 65 percent of the group’s reported profit before tax in 2021 come from.
