HSBC eyes bigger stake in BoComm

HSBC Holdings Plc<5> is trying to raise its stake in the Bank of Communication (BoComm)<601328><3328>, China's fifth-largest lender, to as much as 40%, said Jiang Chaoliang, Chairman of the Chinese bank.

The two lenders showed great interest in the proposal, Jiang said," We have made an agreement that HSBC would have the option to raise the stake, but there is a legal barrier."

Chinese regulators cap foreign ownership of a domestic bank below 20%. But HSBC, which now holds 19.9% of BoComm, denied such a report, saying that it had no such a plan, and did not apply for an exemption to the Chinese law.

HSBC's shares soared nearly 3% to HK$120.8 on Monday.