HSBC is delighted with its 20% stake in China’s BaCom

According to HSBC's CEO Michael Geoghegan, HSBC Holdings is happy with its 20% stake in Bank of Communications, its primary investment vehicle in China. 

Geoghegan decided to make comments after Britain's Sunday Telegraph reported that the HSBC was considering a bid for a major Chinese bank to reinforce its presence in the country as other foreign lenders retrenched.

According to the Telegraph report, HSBC, wanted to buy a majority stake in one of China's big three lenders - ICBC, Bank of China, or China Construction Bank. Meantime, Chinese investment regulations restricted the holdings of foreign banks in domestic lenders to 20%.

The British lender owns just fewer than 20% of China's fifth-largest lender, Bank of Communications.

Even if HSBC wanted to buy control of one of the big three banks, it would have to wait until China relaxed the 20% stake limit, as Geoghegan stated. He also said that there were no discussions with Chinese regulators on allowing investments above 20%.

Asked about his interest in one of China's top three lenders, Geoghegan declined to directly comment on the issue, but reiterated that Bank of Communications was HSBC's primary China investment.