HSBC's top executives are facing intense pressure from shareholders to break up the bank, with some investors calling for a spin-off of its Asian business in order to boost value and simplify regulatory obligations. At an informal meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their strategy, stating that it was working and dividends were being increased.
However, many small shareholders who relied on HSBC's dividend payments are unhappy with the bank's decision to scrap its dividend in 2020 at the request of British regulators. They argue that if the lender splits off its Asian business, it would no longer have to expose Hong Kong shareholders to requests from other jurisdictions.
HSBC is also facing pressure from its largest shareholder, Ping An, China's biggest insurer, which holds an 8% stake in the bank. Huang Yong, chairman of Ping An's asset management arm, has said that the firm will support any initiatives, including a spin-off of HSBC's Asian business, that are conducive to improving the bank's performance and value.
The acquisition of SVB UK, a British unit of Silicon Valley Bank, has also been questioned by critics. They argue that HSBC did not carry out adequate due diligence on SVB UK's customers before making the purchase for £1 ($1.20) last month.
Quinn and Tucker defended the acquisition, calling it a good business opportunity that allowed the bank to gain hundreds of innovative startups as customers. However, they acknowledged that recent developments in the banking industry may have an impact on HSBC's share prices.
The resolution to spin off or reorganize HSBC's Asian business requires 75% of votes to pass at the annual general meeting in May. Ken Lui, an activist shareholder who put the resolution together, doubled down on his call for support ahead of the meeting, saying that "nothing is impossible" and that his team would focus on targeted outreach to institutional shareholders to gain their support.
The pressure on HSBC comes as the banking sector faces turmoil, with recent collapses and takeovers sparking concerns about stability. However, Tucker stated that he did not expect an "immediate impact" on HSBC and believed that such developments represented a period of uncertainty rather than a systemic risk to the sector.
However, many small shareholders who relied on HSBC's dividend payments are unhappy with the bank's decision to scrap its dividend in 2020 at the request of British regulators. They argue that if the lender splits off its Asian business, it would no longer have to expose Hong Kong shareholders to requests from other jurisdictions.
HSBC is also facing pressure from its largest shareholder, Ping An, China's biggest insurer, which holds an 8% stake in the bank. Huang Yong, chairman of Ping An's asset management arm, has said that the firm will support any initiatives, including a spin-off of HSBC's Asian business, that are conducive to improving the bank's performance and value.
The acquisition of SVB UK, a British unit of Silicon Valley Bank, has also been questioned by critics. They argue that HSBC did not carry out adequate due diligence on SVB UK's customers before making the purchase for £1 ($1.20) last month.
Quinn and Tucker defended the acquisition, calling it a good business opportunity that allowed the bank to gain hundreds of innovative startups as customers. However, they acknowledged that recent developments in the banking industry may have an impact on HSBC's share prices.
The resolution to spin off or reorganize HSBC's Asian business requires 75% of votes to pass at the annual general meeting in May. Ken Lui, an activist shareholder who put the resolution together, doubled down on his call for support ahead of the meeting, saying that "nothing is impossible" and that his team would focus on targeted outreach to institutional shareholders to gain their support.
The pressure on HSBC comes as the banking sector faces turmoil, with recent collapses and takeovers sparking concerns about stability. However, Tucker stated that he did not expect an "immediate impact" on HSBC and believed that such developments represented a period of uncertainty rather than a systemic risk to the sector.
ugh i feel for those small shareholders who are like super reliant on hsbc's dividend payments... it's harsh when the big bosses scrap them and then come back with new plans 
but like if they do spin off their asian biz, maybe it'll be a win-win for everyone? 
but what about ping an holding 8% of shares tho? are they just gonna sit back & let hsbc make all these changes or is there more to the story? 
But at the same time, some ppl r all upset cuz they rely on those dividend payments 
It's like, major red flag 
. And let's be real, the banking sector is super sketchy rn 
.
hundreds of startups as customers sounds legit but i guess we'll just have to wait & see what happens 
like they cant just make decisions 4 their own bank? i mean, they gotta think about share prices and dividends now. but at the same time, its not fair 2 those small shareholders who relied on HSBC's dividend payments 4 years ago when they scrapped it. u can feel 4 them 
.
. no need 4 drama here 
He's willin' to back any move that improves HSBC's bottom line. Meanwhile, SVB UK acquisition has some folks all, "Wait a minute... How did they not do due diligence?" 
. Ken Lui's all about targeted outreach, so we'll see how that plays out 
. but come on, 75% of votes to spin off? that's just crazy 
. HSBC's asian business is like the golden child or something... who wouldn't want to keep it under control? 
. And what about all those customers who are now stuck with SVB UK? Didn't they do enough due diligence on that acquisition? 
It's just too much to take in. I'm not convinced that splitting things up is the answer...
. Like they really need a spin-off to "boost value" - just a fancy way of saying they want to get out from under all those pesky regulations 
. I mean, come on, if it's not broken, don't fix it... or in this case, don't spin off 
. Those small shareholders who relied on their dividend payments are going to be like "what's next? a timeshare in Davos?" 
.
. I'm curious to see how this all plays out, but I think it's safe to say that the future of HSBC is gonna be pretty wild 
. One thing for sure, though: only time will tell if their strategy really is working 
.
. If HSBC didn't do its due diligence, that's not okay 
. And now we're seeing banks struggling left and right - it feels like a perfect storm brewing 
.
.
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? And what really is going on here? Is this just another case of banks trying to avoid the real issues or do they actually have a plan 
i think it's great that ping an is supporting the spin-off idea, maybe it'll be a good thing for hsbc in the long run 
Everyone wants a piece of it, but can they get their hands on it? 
... or should I say, my quarterly income 
, right?
if you ask me. Like, didn't they do due diligence on the customers? 
with 75% of votes needed to pass this resolution