HSBC said today that it will pay US$1.1 billion to double its stake in Ping An Insurance (Group) Co. the second-largest insurer in the nation. Its share will reach 19.9 percent, the maximum permitted under Chinese law, reported Bloomberg.
The bank also had plans to buy another 4 percent stake in the near-future IPO of Bank of Communications, the fifth-largest bank in China. The stake will cost almost US$400 million, making HSBC's shares reach 24%.
Amy is confused that how HSBC have so much money in buying shares. Isn't that suggesting the bank's dividends to the shareholders will be less in the near future, because most of th money are spent to buy stakes?