HSBC's top executives are facing intense pressure from shareholders who are demanding a breakup of the bank's Asian business. The lender's largest market is Hong Kong, where many retail investors hold shares in HSBC, and they claim that the bank's performance has been dragged down by its businesses in other regions.
At an informal shareholder meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their strategy, stating that the current approach is working and dividends are being moved up. However, some shareholders continue to argue that a breakup of the bank would be beneficial, citing concerns about HSBC's ability to perform adequate due diligence on SVB UK's customers following the sudden collapse of its parent in the US.
The pressure from shareholders comes as HSBC faces criticism for its decision to scoop up the British unit of SVB without proper due diligence. Critics have questioned whether the bank looked into the financial statements of SVB's clients and whether they can pay back their loans.
Despite this, Quinn and Tucker defended the acquisition, calling it a good business opportunity that would allow HSBC to gain hundreds of innovative startups as customers. They also pushed back on the notion that management had not had time to carry out proper due diligence.
The demands for a breakup of HSBC's Asian business are also backed by China's biggest insurer, Ping An, which holds an 8% stake in the bank and has called for the lender to rethink its structure. The company's chairman, Huang Yong, has stated that Ping An will support any initiatives, including a spinoff of its Asian business, that could boost the bank's performance and value.
The resolution to force HSBC to come up with a plan to spin off or reorganize its Asian business is set to be voted on at the bank's annual general meeting in May. However, it would require 75% of votes to pass, making it an uphill battle for shareholders who are demanding change.
In contrast, activist shareholder Ken Lui has doubled down on his call for support ahead of the meeting Monday, saying that "nothing is impossible" and that his group will focus on targeted outreach to institutional shareholders to present their case and gain their support.
At an informal shareholder meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their strategy, stating that the current approach is working and dividends are being moved up. However, some shareholders continue to argue that a breakup of the bank would be beneficial, citing concerns about HSBC's ability to perform adequate due diligence on SVB UK's customers following the sudden collapse of its parent in the US.
The pressure from shareholders comes as HSBC faces criticism for its decision to scoop up the British unit of SVB without proper due diligence. Critics have questioned whether the bank looked into the financial statements of SVB's clients and whether they can pay back their loans.
Despite this, Quinn and Tucker defended the acquisition, calling it a good business opportunity that would allow HSBC to gain hundreds of innovative startups as customers. They also pushed back on the notion that management had not had time to carry out proper due diligence.
The demands for a breakup of HSBC's Asian business are also backed by China's biggest insurer, Ping An, which holds an 8% stake in the bank and has called for the lender to rethink its structure. The company's chairman, Huang Yong, has stated that Ping An will support any initiatives, including a spinoff of its Asian business, that could boost the bank's performance and value.
The resolution to force HSBC to come up with a plan to spin off or reorganize its Asian business is set to be voted on at the bank's annual general meeting in May. However, it would require 75% of votes to pass, making it an uphill battle for shareholders who are demanding change.
In contrast, activist shareholder Ken Lui has doubled down on his call for support ahead of the meeting Monday, saying that "nothing is impossible" and that his group will focus on targeted outreach to institutional shareholders to present their case and gain their support.
I'm low-key hoping for a breakup tho - can you imagine the drama that'd come with splitting up all those Asian ops? The drama, the tension... it'd be like a soap opera! 
so apparently hsbc's top execs are being super pressured by shareholders 2 break up the bank's asian business!!! like wut is going on?? 
i know they gotta take responsibility 4 their mistakes with svb uk but i also feel for mark tucker & noel quinn cuz dey're tryna do whats best 4 the bank but at the same time, like, cant we just have a breakup now pls? 
especially w/ ping an on board 
china's biggest insurer holdin 8% stake in hsbc lol! i think its so cool dat ken liu is still fightin 4 change 
like, im all 4 targeted outreach & presenting deir case 2 institutional shareholders 
but also omg 75% of votes?? thats soo much 
gotta keep fingers crossed 4 a positive outcome tho 
. I mean, it's like they're being pulled in two different directions. On one hand, they've got the big players like Ping An saying that a breakup would be beneficial, but on the other hand, we've seen what happened with SVB UK... not good 
. And now Ken Lui is really pushing for a spinoff? I don't know if 75% of shareholders will get on board, it's going to be tough 
. What do they think is driving this demand for change? Is it just about the potential for better performance or is there something more at play? 
The shareholders might be right to be concerned about due diligence, but at the same time, I don't want to see HSBC get torn apart by its own investors. It's a big decision that needs careful thought... maybe they should just take a deep breath and trust their strategy for now 
. A breakup of the Asian business might be needed but let's not throw the baby out with the bathwater 
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. And honestly, I can see why they'd want to avoid the mess of dealing with SVB's UK clients without proper due diligence 
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. Either way, I'm excited (and a little nervous 
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? I'm not really sure why some shareholders want to break it up, 'cause I think it's just a normal part of running a bank with businesses in different places... but at the same time, it makes sense if they're worried about due diligence and stuff 
. While Chairman Tucker and CEO Quinn are adamant that their strategy is working, the fact remains that customers' financial statements were not thoroughly vetted before the acquisition 
. The Chinese insurer's chairman, Huang Yong, should probably be leading the charge on this one 
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... I mean, think about it, HSBC's got some huge debt problems in the US, now they're sweeping up SVB UK without proper due diligence? It's like playing Russian roulette with people's life savings 
. And Ping An is backing them, that just means China's got some strings attached 
and then i realized i need to get some new light bulbs for the kitchen because this old one is giving me weird shadows 
. I'm low-key hoping that Ping An's got some magic tricks up their sleeve 
. A breakup or spinoff could be just what HSBC needs to get back on track 
. We'll see how it all plays out come May, but one thing's for sure - this drama is about to go nuclear 
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. One thing's for sure - the outcome of this AGM is going to have some big implications for HSBC's future 
️. Ping An's got a stake in this too, and if they're not happy with the bank's strategy, maybe they should be more involved in the decision-making process 