HSBC's top executives faced intense pressure from shareholders in Hong Kong on Monday, who are calling for the bank to be broken up due to concerns about its underperforming businesses outside of Asia. The London-based lender's Asian operations are its main source of profits, but shareholders believe that splitting the bank would help address issues with its European and American units.
Chairman Mark Tucker and CEO Noel Quinn defended the current strategy, saying it is working and dividends are being increased. However, they acknowledged that there have been discussions about restructuring the bank, which could potentially lead to a breakup of its Asian business.
Shareholders in Hong Kong, where HSBC is a mainstay of many retail investors' portfolios, argue that the lender's performance has been dragged down by its businesses in other regions. They point to the cancellation of the dividend in 2020 as an example of how the bank's underperformance has affected small shareholders who rely on it for their regular expenses.
Despite the pressure, Ping An, China's largest insurer and HSBC's largest shareholder, supports any initiatives that could boost the bank's performance or value. Ping An has not recommended a specific path forward but will support a spinoff of its Asian business if it is deemed beneficial to the bank.
HSBC's acquisition of the British unit of Silicon Valley Bank (SVB) UK has also raised questions about due diligence and potential systemic risks to the banking sector. The lender defended the deal, citing hundreds of innovative startups as customers, but acknowledged that it did not have time to carry out thorough due diligence on SVB UK's customers.
The pressure from shareholders comes at a time of turmoil in the banking industry, with recent collapses of smaller regional banks and the takeover of Credit Suisse. Despite this, HSBC executives do not expect an "immediate impact" on the bank and believe that the share prices of all banks have been suppressed due to these developments.
The resolution to break up HSBC's Asian business requires 75% of votes to pass in May, but activists are working to gain support among institutional shareholders. The outcome is far from certain, with both supporters and opponents of a breakup vying for influence.
Chairman Mark Tucker and CEO Noel Quinn defended the current strategy, saying it is working and dividends are being increased. However, they acknowledged that there have been discussions about restructuring the bank, which could potentially lead to a breakup of its Asian business.
Shareholders in Hong Kong, where HSBC is a mainstay of many retail investors' portfolios, argue that the lender's performance has been dragged down by its businesses in other regions. They point to the cancellation of the dividend in 2020 as an example of how the bank's underperformance has affected small shareholders who rely on it for their regular expenses.
Despite the pressure, Ping An, China's largest insurer and HSBC's largest shareholder, supports any initiatives that could boost the bank's performance or value. Ping An has not recommended a specific path forward but will support a spinoff of its Asian business if it is deemed beneficial to the bank.
HSBC's acquisition of the British unit of Silicon Valley Bank (SVB) UK has also raised questions about due diligence and potential systemic risks to the banking sector. The lender defended the deal, citing hundreds of innovative startups as customers, but acknowledged that it did not have time to carry out thorough due diligence on SVB UK's customers.
The pressure from shareholders comes at a time of turmoil in the banking industry, with recent collapses of smaller regional banks and the takeover of Credit Suisse. Despite this, HSBC executives do not expect an "immediate impact" on the bank and believe that the share prices of all banks have been suppressed due to these developments.
The resolution to break up HSBC's Asian business requires 75% of votes to pass in May, but activists are working to gain support among institutional shareholders. The outcome is far from certain, with both supporters and opponents of a breakup vying for influence.
. I mean, we're talking about one of the biggest banks in the world here, and they're basically saying that their Asian operations are the only ones that matter? That's not how business works anymore, mate. The world has changed so much since 2008, and these executives need to catch up.
. I don't care if they're telling you that hundreds of innovative startups are customers, it doesn't mean we should just let them sweep it under the rug. The fact that they didn't do due diligence on SVB UK's customers? That's like playing with fire.
. I'd rather see them focus on fixing the bigger problems within the bank before even thinking about chopping off the limbs that are still bringing in profits. This is just a classic case of trying to fix what ain't broke 
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. I mean, think about it - HSBC's Asian operations make up like 90% of their profits, but they're struggling in Europe and America? That doesn't sit right with me. If we break up their Asian business, what happens to all those jobs and the economy that depends on them? 
I think regulators need to step in and make sure these big banks are held accountable for their actions. Maybe a breakup isn't the worst idea after all 
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. We can't just keep playing roulette with our financial systems 
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but at the same time, if they break up the Asian business, it could be a major shakeup for the entire bank... and honestly, i think its good that ping an is supporting any moves that could boost the bank's performance or value, thats like super responsible of them 
