HSBC assesses impact of break-up in face of investor fury
‘The profits generated in Asia were allocated to subsidise the loss suffered in Europe and America’
HSBC has confirmed it is modelling a potential break-up of the bank at a fractious meeting with investors in Hong Kong.
Mark Tucker, the chairman, told 1,000 retail investors gathered at Hong Kong’s Kowloon international trade centre yesterday that the board was examining “alternative structures”, without giving details. It comes amid growing pressure from the bank’s biggest shareholder to carve out its Asian operations.
Management has repeatedly knocked back the calls and Mr Tucker yesterday repeated his argument that a divided bank would be weaker. “We continue to believe that our current strategy and structure will deliver very good returns over the next few years,” he said.
Mr Tucker, Noel Quinn, the chief executive, and Peter Wong, the chairman of HSBC’S Hong Kong operations, met with Asian investors for the first time since 2019 yesterday amid pressure from the Chinese insurer Ping An, HSBC’S biggest shareholder, to split the bank in two.
Some retail shareholders support the call and a group presented HSBC management with an open letter at the meeting. “The bank’s performance in recent years was severely dragged down by the businesses in Europe and America,” the letter from the investors calling themselves the Spin Off HSBC Asia Concern Group said.
“Since 2021, the Asian business has contributed almost 70pc of the bank’s profits. Instead of benefiting the shareholders, the profits generated in Asia were allocated to subsidise the loss suffered in Europe and America.” The activists held a small protest outside the venue and hired a truck to drive around Hong Kong with its message on the side.
A spokesman for Ping An said: “We note the demands expressed by a number of HSBC’S small and medium-sized shareholders. We support any proposal that is conducive to improving HSBC’S operating performance and enhances shareholder value.”
Local shareholders in Hong Kong make up a third of HSBC’S investor base. They were angry when HSBC followed Bank of England guidance and cancelled its dividend during the pandemic. A new interim dividend was announced by HSBC on Monday.