HSBC's top executives faced intense questioning from shareholders over the bank's strategy and future direction, with many calling for a breakup of the company. At an informal meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their approach, stating that it was working and dividends were on the way up.
However, not all investors shared this optimism. Many are frustrated with HSBC's performance in regions outside of Asia, which they believe has dragged down the bank's overall performance. Some have called for the company to be split into separate entities, citing concerns over governance and regulatory compliance.
Quinn addressed these complaints directly, saying that profits in Hong Kong and the UK were no longer being impacted by underperformance elsewhere, and that the group as a whole was performing well. However, he also warned that a breakup of the bank would result in significant revenue losses due to the reliance on cross-border transactions.
The pressure comes from multiple fronts, including from some of HSBC's largest shareholders, who have expressed concerns over the bank's structure and governance. Ping An, China's biggest insurer, which holds an 8% stake in HSBC, has backed calls for a reorganization, with an eye on boosting valuation and simplifying regulatory obligations.
HSBC's acquisition of SVB UK, a British unit of Silicon Valley Bank that collapsed last year, is also under scrutiny. Critics have questioned the bank's ability to carry out adequate due diligence on the customers of SVB UK, citing concerns over financial stability.
Despite these challenges, Tucker remained optimistic, saying he did not expect an "immediate impact" from recent turmoil in the banking sector. However, he acknowledged that there would be a period of uncertainty before nerves settled.
The bank's leaders are now facing calls to vote on a proposal to spin off or reorganize HSBC's Asian business, which is seen as its main source of profits. The resolution requires 75% of votes to pass, and has been backed by activist shareholder Ken Lui, who says nothing is impossible.
However, not all investors shared this optimism. Many are frustrated with HSBC's performance in regions outside of Asia, which they believe has dragged down the bank's overall performance. Some have called for the company to be split into separate entities, citing concerns over governance and regulatory compliance.
Quinn addressed these complaints directly, saying that profits in Hong Kong and the UK were no longer being impacted by underperformance elsewhere, and that the group as a whole was performing well. However, he also warned that a breakup of the bank would result in significant revenue losses due to the reliance on cross-border transactions.
The pressure comes from multiple fronts, including from some of HSBC's largest shareholders, who have expressed concerns over the bank's structure and governance. Ping An, China's biggest insurer, which holds an 8% stake in HSBC, has backed calls for a reorganization, with an eye on boosting valuation and simplifying regulatory obligations.
HSBC's acquisition of SVB UK, a British unit of Silicon Valley Bank that collapsed last year, is also under scrutiny. Critics have questioned the bank's ability to carry out adequate due diligence on the customers of SVB UK, citing concerns over financial stability.
Despite these challenges, Tucker remained optimistic, saying he did not expect an "immediate impact" from recent turmoil in the banking sector. However, he acknowledged that there would be a period of uncertainty before nerves settled.
The bank's leaders are now facing calls to vote on a proposal to spin off or reorganize HSBC's Asian business, which is seen as its main source of profits. The resolution requires 75% of votes to pass, and has been backed by activist shareholder Ken Lui, who says nothing is impossible.
I'm not surprised the shareholders are getting anxious about HSBC's strategy... they've been saying the same thing for years now 
. The Asian business is indeed a big money-maker, but it's also super complex and prone to regulatory issues 
. I think Ping An's backing of a reorg makes sense - simplifying things would definitely help with compliance and stability 
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. But hey, it's not like they haven't been saying that before 
. The bigger question is how will Noel Quinn respond to this? His optimism seems a bit... forced 
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they're really getting roasted by shareholders rn... it's like, yeah profits are up in asia but what about the rest of the world? it's not all sunshine and rainbows over there 
and simplify governance would be a huge win. it's crazy that ping an china is backing this move too 
also did u know that ken lui is like a big deal in activist investing now?? i'm lowkey invested in his fund lol anyway back to hsbc - i think it's crazy how one bad move can affect the whole company like the svb uk acquisition still got me thinking about it...and what if they do break up? would we see a reorg of asia vs europe? 
. The Asian business being a major source of profits? Yeah, I get it, but can't they just keep their legs on the ground for once? 
. I mean, what if it doesn't work out? You'll be stuck with all these new entities and whatnot 
. What I want to know is: are these folks lookin' out for the best interests of HSBC or just makin' a quick buck? 
. Don't get me wrong, I get where investors are coming from - performance in non-Asia regions has been lackluster 
, but do they really think a breakup will solve everything? It sounds like a recipe for disaster to me 
. I'm not convinced either way, tbh 
. But at the same time, a breakup might not be the best solution either... all that would do is create even more chaos and uncertainty 
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. That's something everyone can agree on - who doesn't want a bank that's stable and trustworthy? 
. I mean, you can't just blame HSBC for everything that went wrong at SVB... but it does highlight the need for more due diligence on these kinds of deals 
. I'm all for transparency and accountability in banking - let's see some real change come out of this 
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. But seriously, these execs need to get their act together and show us some real numbers. A breakup might be crazy, but if it means stability and growth, I'm down 
not saying i'm in favor of breaking up the bank or anything... but maybe they should listen to those big shareholders who are worried about governance and regulatory compliance? 