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HSBC's top executives faced intense scrutiny from shareholders on Monday, with many calling for a breakup of the bank due to its struggling Asian business. At an informal meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their strategy, which has been criticized by investors who argue that it is not working.
Tucker and Quinn reiterated their opposition to a resolution at the upcoming annual general meeting that would force the bank to come up with a plan to spin off or reorganize its Asian business. The board of directors had previously reviewed various options for restructuring but concluded that such alternatives would "materially destroy value" for shareholders.
However, some investors remain unconvinced and are pushing for a breakup. They argue that HSBC's performance in other regions is dragging down the bank's overall success and that separating its Asian business would be beneficial. The resolution requiring 75% of votes to pass has gained support from activist shareholder Ken Lui, who claims that he has "targeted outreach" to institutional investors to present his case.
The largest shareholder, Ping An, China's biggest insurer, also supports a breakup but does not recommend a specific path forward. The insurer has called for HSBC to explore reorganization options that could boost its valuation and simplify regulatory obligations globally.
HSBC's acquisition of the British unit of Silicon Valley Bank (SVB) has also raised concerns among investors. Critics have questioned whether the bank did adequate due diligence on SVB's customers, particularly in light of the rapid collapse of its parent firm in the US.
Despite these criticisms, Tucker and Quinn defended the deal, calling it a good business opportunity that allowed HSBC to gain hundreds of innovative startups as customers. They pushed back on the notion that management had not had time to carry out proper due diligence.
The banking sector is facing turmoil, with recent collapses of smaller regional banks and the takeover of Credit Suisse affecting share prices across the industry. However, Tucker remains optimistic, stating that he does not expect an "immediate impact" on HSBC's operations. He acknowledged a period of uncertainty but believes it would settle down soon.
As the debate over HSBC's future continues, one thing is clear: the bank's executives must address the concerns of investors and stakeholders if they hope to maintain support for their strategy.
Tucker and Quinn reiterated their opposition to a resolution at the upcoming annual general meeting that would force the bank to come up with a plan to spin off or reorganize its Asian business. The board of directors had previously reviewed various options for restructuring but concluded that such alternatives would "materially destroy value" for shareholders.
However, some investors remain unconvinced and are pushing for a breakup. They argue that HSBC's performance in other regions is dragging down the bank's overall success and that separating its Asian business would be beneficial. The resolution requiring 75% of votes to pass has gained support from activist shareholder Ken Lui, who claims that he has "targeted outreach" to institutional investors to present his case.
The largest shareholder, Ping An, China's biggest insurer, also supports a breakup but does not recommend a specific path forward. The insurer has called for HSBC to explore reorganization options that could boost its valuation and simplify regulatory obligations globally.
HSBC's acquisition of the British unit of Silicon Valley Bank (SVB) has also raised concerns among investors. Critics have questioned whether the bank did adequate due diligence on SVB's customers, particularly in light of the rapid collapse of its parent firm in the US.
Despite these criticisms, Tucker and Quinn defended the deal, calling it a good business opportunity that allowed HSBC to gain hundreds of innovative startups as customers. They pushed back on the notion that management had not had time to carry out proper due diligence.
The banking sector is facing turmoil, with recent collapses of smaller regional banks and the takeover of Credit Suisse affecting share prices across the industry. However, Tucker remains optimistic, stating that he does not expect an "immediate impact" on HSBC's operations. He acknowledged a period of uncertainty but believes it would settle down soon.
As the debate over HSBC's future continues, one thing is clear: the bank's executives must address the concerns of investors and stakeholders if they hope to maintain support for their strategy.