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A Saudi billionaire, Maan Abdulwahed al-Sanea, has spent about £3bn building up a 3.11 per cent stake in HSBC.
Mr Sanea, a former fighter pilot of modest background who is now ranked 97th in the Forbes rich list, has been building the stake since mid-February when shares fell after HSBC issued its first ever profits warning in the wake of the meltdown in the US subprime mortgage market.
It is understood he plans to be a long-term holder of the stock and believes that the recent fall in HSBC’s share price represented a buying opportunity.
The acquisition of the shares in the bank breached a 3 per cent limit that triggered a requirement to notify the market. It makes Mr Al-Sanea the second-largest shareholder in HSBC, after Barclays.
Mr Sanea, who also owns stakes in Citigroup and Bank of China as well as in housebuilders Berkeley Group, has an estimated net worth of $7.5bn (£3.8bn). Although he is widely regarded as one of the most aggressive and dynamic businessmen of his generation, he has maintained a low profile.
He has an expanding business portfolio under his Saad Group, which traditionally centred on construction, healthcare and education, but is increasingly broadening into finance and even low-cost airlines.
The businessman is also a big investor in financial services with a large stake in Samba, the leading bank in Saudi. Bankers also say he is a big art collector, especially in Islamic art.
Mr Sanea’s investment comes as HSBC, led by Michael Geoghegan, chief executive and Stephen Green, chairman, faces increasing scrutiny from investors.
HSBC saw bad debts rocket due to rising arrears in US subprime lending and a sharp rise in defaults forced the bank to increase its bad debt provisions by 36 per cent to $10.6bn in 2006.
Shares in HSBC have underperformed the European banking sector by about 5 per cent in the year to date.
Mr Geoghegan has promised investors he will sort out the problems but he has warned that it would take at least two years to fix the portfolio of bad home loans in the US.
The problems have weighed on HSBC’s share price as investors have questioned the quality of the HSBC’s risk controls as well as its ability to integrate acquisitions properly and keep effective tabs on its ever-expanding global network.
Mr Sanea has acquired the stake in HSBC through Singularis Holdings, a Cayman Islands investment company, wholly owned by AWAL Trust Company. Mr Sanea holds an indirect interest in Singularis by reason of his interest in AWAL Trust Company Limited.
“They are long-term investors in HSBC and have accumulated the holding since mid-February,” said Singularis. HSBC shares rose by 8½p to 927½p.