"It's the price put on a small banking franchise here because there aren't many of them left," said Erwin Sanft, head of China and Hong Kong equity research at Standard Chartered. "If banks don't buy them now, there won't be any in the future."
In late October, China-based investment firm Yue Xie bought Chong Hing Bank, Hong Kong's smallest family-owned bank, for $1.5 billion, or around 2.1 times its book value.
"It could make sense for any foreign bank to acquire one of the Hong Kong banks because they have a good foothold here in Hong Kong, good deposit franchise and it's the bridgeway to China. And the Hong Kong banks provide good opportunities in lending to the Chinese customers," Sabine Bauer, senior director for financial institutions at Fitch Ratings, told CNBC.
Sanft expects banks are jockeying for Hong Kong's local lenders to exploit the growing international use of China's offshore currency, the yuan, with much of that business centered in Hong Kong.
The use of the yuan in cross-border trade settlements is set to grow by 50 percent to 6 trillion yuan ($988 billion) in 2014, according to a December Deutsche Bank report, reflecting the swift adoption of the currency in trade finance. In October, the yuan overtook the euro as the second most used currency in international trade finance, according to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Acquiring a Hong Kong bank also offers a stepping stone into China's banking market at a time when the mainland banks are facing restrictions on their credit growth.
(Read more: Are China bank stocks cheap or just crummy?)
"The tighter credit conditions in China lead to stronger loan demand from the Hong Kong banks," said Sanft. "There's going to be increased demand from the mainland-based corporations."