Demystifying Hong Kong bank licence revocations

Financial institutions regularly need to reassess their entity and regulatory footprint in order to find the balance between capability, capital and returns. In a multi-polar operating environment financial groups continue to be challenged to assess structural enhancements that optimize risk-adjusted returns – such strategic repositioning has triggered a wave of reviews to look at banking licenses for many banking groups here in the region.

Where such review or consideration includes a licensed bank in Hong Kong – an “authorized institution” regulated by the Monetary Authority of Hong Kong (HKMA) under the Banking Ordinance – there are a detailed series of steps to follow including an application to the HKMA for revocation of the banking licence. From a number of recent reviews, we wanted to share some of the key issues to navigate when assessing the required steps and approach to revoking a banking licence in the following briefing.