Hong Kong Takeovers Loom Large With Banks Lending Yuan: Real M&A

As Hong Kong establishes itself as a hub for offshore trade and investment in China’s currency, the city’s family-owned banks can be acquired at some of the lowest valuations since the global financial crisis.

Chong Hing Bank Ltd. is trading at the lowest price to book multiple since the aftermath of Lehman Brothers Holdings Inc.’s collapse, while Dah Sing Banking Group Ltd. is valued at a 37 percent discount to its net assets, according to weekly data compiled by Bloomberg. With competition pushing Chong Hing, Dah Sing and Wing Hang Bank Ltd. down an average of 28 percent in the past year, the prices of Hong Kong banks are “attractive” for a takeover, according to Mike Smith, chief executive officer of Australia & New Zealand Banking Group Ltd.