HSBC Holdings plc has announced plans to privatise its Hong Kong-listed subsidiary Hang Seng Bank in a deal worth about HK$290 billion (about $37 billion) — a move the group says will simplify its structure and underline its long-term commitment to Hong Kong as a key market.

Under the proposal, HSBC’s Asia-Pacific arm will pay HK$155 in cash per share to acquire the remaining 36.5 per cent of Hang Seng it does not already own — a 30 per cent premium to the bank’s last closing price of HK$119. If approved by shareholders and the Hong Kong High Court, Hang Seng’s shares will be delisted and the bank will become a wholly-owned subsidiary of HSBC by mid-2026.

“Hang Seng Bank has been rooted in Hong Kong for close to 100 years,” HSBC said. “We intend to continue to respect that legacy and to serve Hong Kong through both the HSBC and Hang Seng Bank brands.”

The bank said the deal would be “accretive to earnings per share” by removing minority interest deductions but would temporarily reduce its CET1 capital ratio by about 125 basis points from 14.6 per cent. HSBC plans to restore its capital position by pausing share buybacks for three quarters.

Funding for the buyout will come entirely from HSBC’s internal resources. The bank said the proposal reflects “strong conviction in Hong Kong’s future as a leading global financial centre and super-connector with mainland China”.