HSBC's top executives are facing intense pressure from shareholders who want the bank to be broken up. The lender's Asian business is seen as its main source of profits, but some investors believe that separating it from the rest of the bank would allow for more efficient management and potentially boost value.
In a tense meeting with over 1,000 shareholders in Hong Kong, HSBC's chairman Mark Tucker and CEO Noel Quinn defended the bank's strategy, saying that it was working and that dividends were being increased. However, they also acknowledged that some investors are unhappy with the bank's performance in regions outside of Asia.
Quinn addressed these concerns directly, stating that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. He also pushed back on the idea that the bank had not done enough due diligence on its acquisition of the British unit of Silicon Valley Bank (SVB) just days after SVB's collapse.
Some shareholders, including small investors who rely on the dividend payments to pay their bills, are calling for the bank to spin off its Asian business. One shareholder, Christine Fong, said that 500 small investors had been affected by the cancellation of HSBC's dividend in 2020 and were now supporting the call for a breakup.
Ping An, China's largest insurer, which holds an 8% stake in HSBC, has also backed calls for the bank to rethink its structure. The company's chairman, Huang Yong, said that he would support any initiatives that could improve HSBC's performance and value.
The pressure on HSBC comes as the banking sector is facing turmoil. Recent collapses of smaller regional banks and the takeover of Credit Suisse have sent shockwaves through the industry, leading to suppressed share prices for all banks.
HSBC's executives acknowledged that there was uncertainty in the market but did not believe it represented a systemic risk to the sector. Tucker said he expected a period of uncertainty before nerves settled, but emphasized that the bank's strategy was working and dividends were being increased.
The outcome of the upcoming general meeting is still uncertain, with some shareholders backing the call for a breakup while others are supporting the current strategy. One activist shareholder, Ken Lui, has launched a campaign to support the resolution and said that "nothing is impossible" when it comes to changing the bank's structure.
In a tense meeting with over 1,000 shareholders in Hong Kong, HSBC's chairman Mark Tucker and CEO Noel Quinn defended the bank's strategy, saying that it was working and that dividends were being increased. However, they also acknowledged that some investors are unhappy with the bank's performance in regions outside of Asia.
Quinn addressed these concerns directly, stating that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. He also pushed back on the idea that the bank had not done enough due diligence on its acquisition of the British unit of Silicon Valley Bank (SVB) just days after SVB's collapse.
Some shareholders, including small investors who rely on the dividend payments to pay their bills, are calling for the bank to spin off its Asian business. One shareholder, Christine Fong, said that 500 small investors had been affected by the cancellation of HSBC's dividend in 2020 and were now supporting the call for a breakup.
Ping An, China's largest insurer, which holds an 8% stake in HSBC, has also backed calls for the bank to rethink its structure. The company's chairman, Huang Yong, said that he would support any initiatives that could improve HSBC's performance and value.
The pressure on HSBC comes as the banking sector is facing turmoil. Recent collapses of smaller regional banks and the takeover of Credit Suisse have sent shockwaves through the industry, leading to suppressed share prices for all banks.
HSBC's executives acknowledged that there was uncertainty in the market but did not believe it represented a systemic risk to the sector. Tucker said he expected a period of uncertainty before nerves settled, but emphasized that the bank's strategy was working and dividends were being increased.
The outcome of the upcoming general meeting is still uncertain, with some shareholders backing the call for a breakup while others are supporting the current strategy. One activist shareholder, Ken Lui, has launched a campaign to support the resolution and said that "nothing is impossible" when it comes to changing the bank's structure.
. Meanwhile, I'm over here trying to figure out how to pay my own bills on time without getting hit with a dividend cancellation 
. Ping An backing the breakup is like me backing a pie-eating contest – it's just gonna get messy! 
. Ping An backing calls for restructure is a good sign, maybe they can help HSBC make better decisions 
. We need more transparency and accountability in this bank. It's time for change 
. Breakin' up the Asian biz might be a good idea, but it's also a big risk 
? 
, and banks need to be careful not to get caught in the whirlwind 
. Just hope no one gets hurt 
