HSBC wins mandate on $100-billion Saudi Aramco IPO

24/04/2017 15:14 AST

HSBC Holdings Plc has been formally mandated as an adviser on the initial public offering of Saudi Arabia’s national oil giant Aramco, expected to be the world’s largest ever IPO, HSBC’s chief executive said on Monday.

Europe’s biggest bank joins peers including JPMorgan Chase & Co and Morgan Stanley on the deal, which is expected to raise some $100-billion and is the centrepiece of the Saudi government’s ambitious strategy to diversify away from oil.

HSBC’s Chief Executive Stuart Gulliver announced the bank’s appointment on the deal at a shareholders’ meeting in Hong Kong, confirming a Reuters report in February that the bank was close to being mandated on the hottest investment banking ticket in the world.

Gulliver also said HSBC is confident it can maintain dividend payouts in the foreseeable future and expects to exceed risk-weighted asset and cost-saving targets.

Despite earnings pressure, HSBC has retained its dividend payout ratio at a higher level in the last few years, at a time when some of its peers, including Standard Chartered, withheld dividend payments for 2016.

The bank may have to move “some thousand roles” from Britain to Paris depending on how the country’s Brexit negotiations with the European Union unfold, chairman Douglas Flint added, reiterating the bank’s previous estimates of staff moves.

HSBC last month named AIA Group boss Mark Tucker as the new chairman of its board, replacing veteran Flint, whose departure will end one of the longest-serving management partnerships at a major global bank.

CEO Gulliver is also due to leave in 2018, and one of the main tasks facing Tucker immediately after taking over the new role in October will be selecting a new chief executive for Europe’s biggest bank.

Reuters