HSBC to acquire the majority stake in $1.9bn Sebonic Bank

By Simon LeeSeptember 15, 2018 11:38:02Financial firms have long sought to acquire Sebonics, a subsidiary of HSBC Holdings Plc, after it failed to repay debts and has struggled to raise capital in recent years.

The Financial Services Authority (FSA) will soon announce whether it will approve the deal.

HSBC has not yet commented on the approval of the Sebonisic deal, which will be announced later this week.

The company has not revealed its shares, but it has been quoted by Reuters as having a market value of around $1bn, up from around $932m in 2016.

Its shares have been down more than 25% this year, but have risen more than 10% since mid-2018.

The FSA said the bank was in “strong financial condition” and that it was not able to confirm the value of the shares at the time.

Its acquisition of Sebonices could have ramifications for the financial sector.

HSBC, the world’s largest bank, has been criticised by regulators and the public over its role in laundering money for Colombian drug cartels.

In 2016, the FSA said that it had been able to trace some $3.3bn of HSBC’s illicit activities to drug traffickers through Sebonicia, which the regulator described as an “incredibly efficient and highly effective criminal investigative tool”.

A regulator told Reuters that the bank could be forced to stop laundering money through Sebalics.

The Sebonice deal comes just days after HSBC secured the largest loan in the company’s history from the state-owned bank of Vietnam, for $1 billion.

The bank’s $3bn loan from Vietnam, which is subject to a repayment period of five years, has helped it improve its balance sheet and attract more investors.