HSBC's top executives faced intense questioning from shareholders on Monday, who are calling for the bank to be split up. The bank's chairman, Mark Tucker, and CEO, Noel Quinn, defended their strategy in the face of mounting pressure to separate the Asian business from the rest of the bank.
Shareholders in Hong Kong, where HSBC is a mainstay of many retail investors' portfolios, have been unhappy with the bank's performance in other regions. They argue that the London-based lender's businesses outside of Asia are dragging down its profits.
Quinn addressed these complaints head-on, saying that the group as a whole was performing well and that profits in Hong Kong and the UK were no longer being dragged down by underperformance elsewhere. However, pressed on the issue, he said a breakup of the bank would result in "significant revenue loss" due to cross-border transactions.
Shareholders have been unhappy with HSBC's decision to scrap its dividend in 2020, at the request of British regulators. They argue that if the lender cordoned off its activities in Asia, it would no longer have to expose Hong Kong shareholders to requests in other jurisdictions.
The pressure on HSBC is coming from various directions. Its largest shareholder, Ping An, China's biggest insurer, holds an 8% stake in HSBC and has backed calls for the bank to rethink its structure. The insurance giant has said it will support any initiatives, including a spinoff of its Asian business, that could boost its stock performance or value.
HSBC has also faced criticism over its purchase of the British unit of Silicon Valley Bank, which was made just days after the US parent company collapsed. Critics have questioned HSBC's ability to perform adequate due diligence on SVB UK's customers.
Despite the pressure, HSBC's top executives remained defiant, defending their strategy and pushing back on concerns about the bank's ability to carry out proper due diligence on its recent acquisitions.
Shareholders in Hong Kong, where HSBC is a mainstay of many retail investors' portfolios, have been unhappy with the bank's performance in other regions. They argue that the London-based lender's businesses outside of Asia are dragging down its profits.
Quinn addressed these complaints head-on, saying that the group as a whole was performing well and that profits in Hong Kong and the UK were no longer being dragged down by underperformance elsewhere. However, pressed on the issue, he said a breakup of the bank would result in "significant revenue loss" due to cross-border transactions.
Shareholders have been unhappy with HSBC's decision to scrap its dividend in 2020, at the request of British regulators. They argue that if the lender cordoned off its activities in Asia, it would no longer have to expose Hong Kong shareholders to requests in other jurisdictions.
The pressure on HSBC is coming from various directions. Its largest shareholder, Ping An, China's biggest insurer, holds an 8% stake in HSBC and has backed calls for the bank to rethink its structure. The insurance giant has said it will support any initiatives, including a spinoff of its Asian business, that could boost its stock performance or value.
HSBC has also faced criticism over its purchase of the British unit of Silicon Valley Bank, which was made just days after the US parent company collapsed. Critics have questioned HSBC's ability to perform adequate due diligence on SVB UK's customers.
Despite the pressure, HSBC's top executives remained defiant, defending their strategy and pushing back on concerns about the bank's ability to carry out proper due diligence on its recent acquisitions.
. I mean, they're not just talking about splitting up the Asian business, they're also saying that it's dragging down profits elsewhere... like in Hong Kong and the UK 
. And let's be real, no one wants to see their investment underperforming 
.
. Ping An's backing calls for a restructure is definitely a good point, though... if it means boosting their stock performance, who cares? 
It's just common sense, right?
.
, shareholders are right, Asian business is blooming 
while UK and rest of Europe is struggling 
gotta be smart move, split it up or lose investors 
and it's not looking good for the bank's future. The pressure from Ping An is real, too - that 8% stake isn't going to make or break on its own 
. And let's be real, those regulators back in 2020 were pretty clear about what they wanted, so it's hard to blame the shareholders for calling them out. But a breakup would come with some major caveats 
. Still, I think HSBC needs to listen up 
. Those shareholders aren't going away anytime soon 
. It's like, can't they just split it off and get the profits going? 
. And what's with the dividend thing? 
.
That just makes me think HSBC is trying to avoid accountability 
. They're trying to keep their Asian business under wraps 
. Meanwhile, the US parent company collapsed and they just bought up Silicon Valley Bank's customers without doing proper due diligence 
.
. Maybe a breakup would be good for everyone involved 
.
Plus, Ping An's got its finger in the pie as one of the biggest shareholders, so I trust their judgment on this one 
It seems like all this drama is just causing unnecessary stress for the bank's shareholders 
.
. And what about all those Hong Kong shareholders who have their money tied to HSBC? It'd be a big risk for them to lose it all just because of underperformance elsewhere.