HSBC agrees major investment in Chinese bank

Banking giant HSBC unveiled a major push into mainland China today by agreeing the largest ever single investment from an overseas bank.

The global group is paying around $1.75bn (€2.64bn) for a 19.9% stake in state-owned Bank of Communications, which is China’s fifth biggest bank.

The move for the Shanghai-based bank comes as China prepares to open up its banking industry to allow foreign groups to compete on an equal footing.

HSBC, which opened in Hong Kong and Shanghai more than 130 years ago, is already among the biggest foreign banks in mainland China with 10 branches.

Chairman John Bond said the deal, which still requires regulatory approval, represented a “major commitment” for both parties.