HSBC's Top Execs Face Tense Shareholder Meeting as Calls for Breakup Mount
The banking giant's top executives faced intense questioning from shareholders on Monday at an informal meeting in Hong Kong, where the lender is HSBC's largest market. The tension was palpable as investors pressed the bank's leaders to explain why they were resisting calls to spin off or reorganize their Asian business, which has been a main source of profits.
Chairman Mark Tucker and CEO Noel Quinn defended their strategy, saying it was working and that dividends were being increased. However, many shareholders were unconvinced, arguing that the bank's performance in other regions was dragging down its overall profitability.
Shareholders in Hong Kong, where HSBC is a mainstay of many retail investors' portfolios, have been unhappy with the lender's decision to scrap its dividend in 2020 at the request of British regulators. They argue that if the bank were to separate its Asian business from the rest of the bank, it would no longer have to expose Hong Kong shareholders to requests in other jurisdictions.
Activist shareholder Ken Lui has been calling for support ahead of the meeting on Monday, saying "nothing is impossible" and promising to target institutional shareholders with his team's message. Ping An Insurance Group, China's largest insurer, which holds an 8% stake in HSBC, has also backed calls for the bank to rethink its structure.
The lender's acquisition of Silicon Valley Bank's UK arm just days after the US parent collapsed has also raised eyebrows. Critics have questioned how quickly the deal was made and whether adequate due diligence was carried out on SVB UK's customers.
Tucker and Quinn pushed back on these concerns, saying that the acquisition presented a good business opportunity to gain hundreds of innovative startups as customers. They downplayed the notion that management had not had time to carry out proper due diligence.
The banking sector is experiencing turmoil globally, with recent collapses of smaller regional banks and the takeover of Credit Suisse depressing share prices across the board. However, Tucker said he did not believe this represented a systemic risk to the sector and expected a period of uncertainty before nerves settled.
As HSBC faces mounting pressure from shareholders and investors, it remains to be seen whether its top executives will ultimately cave to calls for a breakup or reorganization of their Asian business.
The banking giant's top executives faced intense questioning from shareholders on Monday at an informal meeting in Hong Kong, where the lender is HSBC's largest market. The tension was palpable as investors pressed the bank's leaders to explain why they were resisting calls to spin off or reorganize their Asian business, which has been a main source of profits.
Chairman Mark Tucker and CEO Noel Quinn defended their strategy, saying it was working and that dividends were being increased. However, many shareholders were unconvinced, arguing that the bank's performance in other regions was dragging down its overall profitability.
Shareholders in Hong Kong, where HSBC is a mainstay of many retail investors' portfolios, have been unhappy with the lender's decision to scrap its dividend in 2020 at the request of British regulators. They argue that if the bank were to separate its Asian business from the rest of the bank, it would no longer have to expose Hong Kong shareholders to requests in other jurisdictions.
Activist shareholder Ken Lui has been calling for support ahead of the meeting on Monday, saying "nothing is impossible" and promising to target institutional shareholders with his team's message. Ping An Insurance Group, China's largest insurer, which holds an 8% stake in HSBC, has also backed calls for the bank to rethink its structure.
The lender's acquisition of Silicon Valley Bank's UK arm just days after the US parent collapsed has also raised eyebrows. Critics have questioned how quickly the deal was made and whether adequate due diligence was carried out on SVB UK's customers.
Tucker and Quinn pushed back on these concerns, saying that the acquisition presented a good business opportunity to gain hundreds of innovative startups as customers. They downplayed the notion that management had not had time to carry out proper due diligence.
The banking sector is experiencing turmoil globally, with recent collapses of smaller regional banks and the takeover of Credit Suisse depressing share prices across the board. However, Tucker said he did not believe this represented a systemic risk to the sector and expected a period of uncertainty before nerves settled.
As HSBC faces mounting pressure from shareholders and investors, it remains to be seen whether its top executives will ultimately cave to calls for a breakup or reorganization of their Asian business.
Just saw the latest stock market charts and I'm like woah... HSBC's Asian business is making up like 40% of their overall profits 
! No wonder shareholders are so keen on separating it from the rest of the bank 
. 
Their portfolios are basically all tied to this one bank and if they get split up, their entire portfolio would be affected 
.
. Like, did you see the chart on Credit Suisse's share price? 
It's been getting trashed since the takeover 
. And then there was Silicon Valley Bank's UK arm... 
. They have like, 8% of HSBC shares 
.
. Share prices are all over the place 
I was totally down with breaking up hsbc's asian biz they're raking in all the cash but dragging down the rest of the company 
. I mean, ping an insurance group is already backing the breakup so maybe theres something to be said for it 
. I mean, if HSBC is making tons of money in Asia, why can't they just separate the losses from the gains? It's basic accounting 101 
I mean, was proper due diligence really done on that deal? 
.
One thing's for sure, the banking sector is getting a lot of heat right now, and HSBC is right in the middle of it 
... like wut r they gonna gain frm splittin off? 
!