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2016: Potential Changes for Some Hawai‘i Financial Institutions

Daniel Ramirez / Flickr
Daniel Ramirez / Flickr

Stock markets around the world began the New Year with lower values—especially in China. But for investors taking the longer view, 2016 may present some intriguing stories. And for those with an eye on local companies, one of those stories involves hometown financial stocks. HPR’s Bill Dorman explains.

Depending on how events transpire, it’s possible that two more local banks may be trading as independent companies at some point this year.  It’s been about 17 years since investors could buy shares of First Hawaiian Bank as a stand-alone company.

Since then, ownership of First Hawaiian has been linked with other financial institutions.  Banc West was first, and since late 2001 First Hawaiian, along with Banc West has been a wholly-owned subsidiary of the French company BNP Paribas.  All of that may change this year.  BNP is the largest listed bank in France---a sprawling institution that will face new capital requirements next year.  Considering options to meet those European capital requirements has led BNP to examine what it calls “strategic alternatives” for First Hawaiian--a sale or an initial public offering.

It’s been a year of growth for First Hawaiian—net income up a little more than 4.5% over the first 9 months of 2015…with assets up 4% to nearly 19-billion dollars.  Bank of Hawai‘i has more than 15-billion dollars in assets…and over the past year its stock price has seen relatively strong growth—up nearly 9% from a year ago.  The broader market’s been flat at best—the Dow Jones Industrial Average down about 2% compared to a year ago - the S&P 500 Index down fractionally. 

American Savings Bank still trades as part of Hawaiian Electric Industries—and if the NextEra deal goes through, ASB would spin off as a separate company.  Questions about the future of that deal have been a factor in pushing Hawai‘i Electric’s shares down 13% from a year ago.  Central Pacific’s numbers have been positive—shares up about 5%.  And the biggest local financial winner for investors in the past year: Territorial Savings Bank: shares up nearly 30%. 

Bill Dorman has been the news director at Hawaiʻi Public Radio since 2011.
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