HSBC's top executives faced intense questioning from shareholders at the bank's annual general meeting in Hong Kong, where they defended their strategy and faced calls to break up the group.
The bank's top brass, including Chairman Mark Tucker and CEO Noel Quinn, were grilled on issues ranging from their approach to addressing demands for an overhaul of the business to their purchase of Silicon Valley Bank's UK arm. They reiterated that the board had previously reviewed a range of options for restructuring the bank and concluded that such alternatives would "materially destroy value" for shareholders.
The shareholders' concerns centered on the bank's performance in Asia, which they believe has dragged down the group's overall performance. However, HSBC's profits in Hong Kong and the UK are now performing well as a whole, according to Quinn.
Shareholders also expressed frustration over the bank's scrapping of its dividend in 2020 at the request of British regulators, which they argue would have protected their interests. Some, like district council member Christine Fong, who represents around 500 small shareholders affected by the cancellation, have joined calls for a breakup of the bank.
China's largest insurer, Ping An, also backs calls for the bank to rethink its structure. While its views haven't changed since last November, when Huang Yong, chairman of Ping An's asset management arm, said it would support any initiatives conducive to improving HSBC's performance and value, the source close to the matter told CNN that the insurer has been calling for a reorganization with an eye on boosting its valuation and simplifying regulatory obligations globally.
HSBC also faced criticism over its rapid acquisition of SVB UK's customers just days after the US bank collapsed. Critics questioned whether the bank carried out adequate due diligence, while Fong asked if management had looked into the financial statements of the clients.
Quinn and Tucker defended the acquisition, calling it a good business opportunity that allowed HSBC to gain hundreds of innovative startups as customers. They pushed back on the notion that management hadn't had time to carry out proper due diligence.
The bank's leaders also weighed in on recent tumult in the banking industry, noting that share prices have been suppressed following the collapse of smaller regional banks and the takeover of Credit Suisse. However, they did not expect an "immediate impact" on HSBC, with Tucker stating that he believed such developments represented "a period of uncertainty" rather than a systemic risk to the sector.
The fate of the proposal to break up or reorganize HSBC's Asian business remains uncertain, with the resolution requiring 75% of votes to be passed in May. While some shareholders, like activist Ken Lui, are doubling down on their support for the proposal, others remain unconvinced.
The bank's top brass, including Chairman Mark Tucker and CEO Noel Quinn, were grilled on issues ranging from their approach to addressing demands for an overhaul of the business to their purchase of Silicon Valley Bank's UK arm. They reiterated that the board had previously reviewed a range of options for restructuring the bank and concluded that such alternatives would "materially destroy value" for shareholders.
The shareholders' concerns centered on the bank's performance in Asia, which they believe has dragged down the group's overall performance. However, HSBC's profits in Hong Kong and the UK are now performing well as a whole, according to Quinn.
Shareholders also expressed frustration over the bank's scrapping of its dividend in 2020 at the request of British regulators, which they argue would have protected their interests. Some, like district council member Christine Fong, who represents around 500 small shareholders affected by the cancellation, have joined calls for a breakup of the bank.
China's largest insurer, Ping An, also backs calls for the bank to rethink its structure. While its views haven't changed since last November, when Huang Yong, chairman of Ping An's asset management arm, said it would support any initiatives conducive to improving HSBC's performance and value, the source close to the matter told CNN that the insurer has been calling for a reorganization with an eye on boosting its valuation and simplifying regulatory obligations globally.
HSBC also faced criticism over its rapid acquisition of SVB UK's customers just days after the US bank collapsed. Critics questioned whether the bank carried out adequate due diligence, while Fong asked if management had looked into the financial statements of the clients.
Quinn and Tucker defended the acquisition, calling it a good business opportunity that allowed HSBC to gain hundreds of innovative startups as customers. They pushed back on the notion that management hadn't had time to carry out proper due diligence.
The bank's leaders also weighed in on recent tumult in the banking industry, noting that share prices have been suppressed following the collapse of smaller regional banks and the takeover of Credit Suisse. However, they did not expect an "immediate impact" on HSBC, with Tucker stating that he believed such developments represented "a period of uncertainty" rather than a systemic risk to the sector.
The fate of the proposal to break up or reorganize HSBC's Asian business remains uncertain, with the resolution requiring 75% of votes to be passed in May. While some shareholders, like activist Ken Lui, are doubling down on their support for the proposal, others remain unconvinced.
... They're saying they don't need to break up or reorganize, but it seems like there's a lot of discontent among shareholders 
. I mean, can you blame them? The bank's profits in Asia are struggling and that's affecting the whole group 
. And what about this acquisition business? Wasn't SVB UK just sold to HSBC days after it collapsed? 
That doesn't seem like a good business move to me 
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. Are they trying to boost their valuation too? 
And what about the scrapping of dividends in 2020? Was that really necessary 
. Maybe they should look into ways to improve Asian performance before considering a breakup or reorganization 
.
like no one got hurt by that scrapping of dividends and now they're trying to spin it as a good thing lol. asian performance is still trash but at least profits are back up for UK and hk, yay 
its all about simplifying regos globally tho, i guess that sounds cool if u ask me 
they gotta deal with all this drama and get nothing from the dividend lol I mean china's ping an insurer is on their side tho which is good news for them 
. And what's up with all these calls for a breakup? It's just gonna lead to more hassle and uncertainty 
. Can't we just let them run their own shop for once?
. I mean, the top execs were getting roasted by shareholders left and right. It's like they expected everything to be smooth sailing, but the truth is, the bank's performance in Asia has been a total mess. 
The fact that profits are now performing well in Hong Kong and the UK is just icing on the cake – it's not like they were expecting this to happen, right? 
The way it's been handled so far has been pretty underwhelming, if you ask me. And that acquisition of SVB UK? 
! I'm not surprised Ping An is backing calls for restructuring – they're always looking to stay ahead of the curve 
. It's time to simplify regulatory obligations globally, if you ask me 
. Breakup or reorg, it's all about finding a solution that benefits everyone in the long run 
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. it's all pretty complex 
.
. Some of them think the bank should break up or reorganize its Asian business to boost profits 
.
. I mean, who wants to invest in a company that just happens to have a bunch of clients from another bank that just collapsed? 
. Do you guys think HSBC can turn things around? 
. I mean, what's really going on behind those closed doors at HSBC HQ? Are they just looking out for themselves or is there a bigger game at play?
. It seems like a pretty dodgy move, especially if they didn't do their due diligence. And let's be real, who wouldn't want to get into bed with hundreds of innovative startups? 
. If I had to put my money on it, I'd say there's a good chance the Asian business gets reorganized or broken up 
. But we'll have to wait and see what happens 
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. Either way, I hope that the top execs at HSBC are taking all the feedback from shareholders seriously and using it to make some positive changes 
. I mean, I get that profits in Hong Kong and the UK are doing well, but shouldn't we be looking at how that affects the rest of the business? It feels like they're trying to sugarcoat things rather than address the real issues.