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May 26, 2022

HSBC planning IPO for Indonesian business

British banking group HSBC is weighing an initial public offering (IPO) of its Indonesian arm, Bloomberg has reported citing unnamed sources. 

HSBC’s plans for floating shares are at an advanced stage, the sources said, adding that the lender has not submitted a formal application for the IPO yet. 

According to the sources, Indonesia’s Financial Services Authority is aware of the discussion.

A spokesperson for the regulator refused to offer any comment on the report.

Notably, the Indonesian regulator had promised to re-list HSBC’s Indonesian arm after the bank moved to merge with PT Bank Ekonomi Raharja in 2015. 

The UK-based bank acquired an 88.9% stake in PT Bank Ekonomi Raharja in 2008 in a deal valued at $607.5m.

The move doubled its branch network across Indonesia. In 2020, the bank operated a branch network of 69 across 24 cities. 

Currently, HCBC’s Indonesian arm employs over 3,000 people and operates in commercial, investment, wealth, and personal banking spaces. 

Through the listing, the bank aims to capitalise on the growth opportunities offered by the Indonesian economy.

Government’s estimates suggest that Indonesia is expected to witness an economic growth of 4.8% to 5.5% in 2022.

The news comes as HSBC faces pressure from its largest investor to split its Asian and Western operations.  HSBC itself is shifting focus to Asia as it mobilises billions in capital and pulls back operations from unprofitable regions. 

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