Magazine article American Banker

Lloyds Seen Failing to Slow Hongkong Bid

Magazine article American Banker

Lloyds Seen Failing to Slow Hongkong Bid

Article excerpt

Lloyds Bank PLC is unlikely to stop the parent of Hongkong and Shanghai Banking Corp. from getting preliminary Fed approval for its bid to acquire Midland Bank PLC, analysts said Tuesday.

"Common sense tells you that the Fed could have no conceivable objection" to the Hongkong and Shanghai bid, said Julian Robins, an analyst with Barclays de Zoete Wedd in London.

"Lloyds is clutching at straws," he said.

A Lloyds spokesman confirmed a report in the Financial Times Tuesday that the London-based bank last week submitted objections to the U.S. central bank over the request by Hongkong and Shanghai - a unit of HSBC Holdings PLC - for temporary Fed approval for its bid for Midland.

Issues of Marine Midland

Lloyd's is requesting a full-fledged examination by the Federal Reserve Board of HSBC's management of its U.S. unit, Marine Midland Banks Inc., before the Fed gives any approval for the Midland acquisition.

Under the Bank Holding Company Act, a foreign institution seeking to acquire another bank overseas can obtain temporary Fed approval to acquire the target bank's U.S. nonbanking units.

The approval is subject to a final Fed review, at which time the foreign bank may be required to dispose of any units it is not entitled to own under U.S. banking laws.

The Lloyds spokesman said the bank expected a Fed response to the request within a week.

Handful of U.S. Operations

However, analysts said Midland has only a handful of small operations in the United States and its merger with another bank is not likely to be of much concern to U. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.