HSBC FOILS PLAN BY MAJOR INVESTOR TO BREAK UP BANK

HSBC has fought off an attempt by its biggest shareholder to break up the bank during a frequently tense annual general meeting.

Chinese insurer Ping An has been trying for more than a year to split the bank.

On Friday it failed to gain the backing of any other major shareholder as investors voted to reject the proposal.

HSBC chairman Mark Tucker said the result “draws a line” under a long-running debate about the bank’s structure.

Despite being headquartered in London, the large majority of HSBC’s profits are made in Asia.

Ping An, which holds an 8% stake in HSBC, wants the lender to separate out its Asian business.

It argues that the bank’s profitable Asia operations are subsidising other parts of the bank that are not performing as strongly. Splitting HSBC would also set it free from the requirements of UK regulators.

Ping An and Ken Lui, an individual Hong Kong-based shareholder in HSBC, needed to secure 75% of all votes cast at the AGM to force through the split.

They failed to get those numbers, with no other major institutional investor backing the plan.

Mr Tucker told the AGM a break-up of the bank would undermine its global strategy, and would be both risky and costly.

“It would not be in shareholders’ interests to split the bank,” he told the AGM in Birmingham, which was frequently interrupted by climate change activists who claim HSBC is not doing enough to reduce its financing of polluting industries and businesses. At the meeting, Mr Lui vowed to fight on with the break-up plan, saying he would keep pressure on HSBC’s management and would lobby the bank’s many small shareholders in Hong Kong.

It is not clear what Ping An’s next step will be but there are bigger factors at play beyond making a return on its investment.

Ping An is partly owned by the Chinese state and, according to some analysts, could be representing Beijing’s political aims as much as its shareholders’ financial interests.

Hong Kong is by far China’s most important financial hub and HSBC is the centrepiece institution.

Some argue that to Beijing, the idea of simply leaving the city’s most valuable asset in Western hands could be a risk that is too big to take.

The example of Russia’s economic isolation following the invasion of Ukraine is a case in point. - BBC

ZIMBABWE is edging closer to rejoining the Commonwealth as the bloc warms up to the Second Republic’s re-engagement and engagement drive with President Mnangagwa using his visit to the United Kingdom to attend the coronation of King Charles III, to engage the Commonwealth along with the British government, business people and others.

The President returned home yesterday and was received at the Robert Gabriel Mugabe International Airport by Vice President Constantino Chiwenga, Zanu PF Vice President and Second Secretary Cde Kembo Mohadi, Minister of Defence and War Veterans Affairs

Oppah Muchinguri-Kashiri, service chiefs and other senior Government officials.

In an interview, President Mnangagwa said during his engagements with both the Commonwealth and the British government, he saw positive signals. “We were able to meet the British Minister of African Affairs and Development (Andrew Mitchell). We had a very long chat and the indications are that there is a spirit of cooperation developing between Harare and London, which we will continue to pursue,” the President.

In London, the President also took time to engage with the Commonwealth and from the meetings he had with the bloc’s Secretary General

Baroness Patricia Scotland and Commonwealth chairperson Rwandan President Paul Kagame, Zimbabwe is on the cusp of rejoining the group as part of its pillar foreign policy of engagement and re-engagement.

“Last night (Saturday) I had a meeting with the Secretary General of the Commonwealth (Lady Scotland). There was a Commonwealth meeting, which was held because most of the members of the Commonwealth had come for the coronation, so they met as Commonwealth. Thereafter I met with the Secretary General to discuss issues about our application. I also met the Chairman of the Commonwealth President Paul Kagame; the indications are that so far, the signals are positive,” he said. Last year, a Commonwealth delegation led by the organisation’s Assistant Secretary-General, Professor Luis Franceschi, visited Zimbabwe and acknowledged that Harare had made progress in laying the desired foundation for re-admittance into the association mainly made up of former British colonies.

Under the leadership of President Mnangagwa, Zimbabwe is vigorously engaging and reengaging all nations, and tremendous progress has been made on that, as shown by the warm welcome the President got from British royalty between Friday and Saturday.

- THE HERALD