HSBC's top executives are facing intense scrutiny from shareholders over their strategy and business practices, with calls growing louder for a potential breakup of the bank.
At an informal shareholder meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended the bank's current approach to its Asian business, which is seen as the main source of profits. However, many investors are frustrated with the performance of HSBC's businesses outside of Asia and are pushing for a reorganization or spinoff of its Asian operations.
Tucker reiterated that the board recommends voting against a resolution on the agenda for the bank's annual general meeting in May, which would require HSBC to develop a plan to reorganize or spin off its Asian business. He stated that such a move would not be in the best interest of shareholders and would likely result in "materially destroy value" for the company.
Quinn also addressed concerns about the bank's performance outside of Asia, saying that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. However, he acknowledged that a breakup of the bank could lead to significant revenue losses due to the reliance on cross-border transactions.
Shareholders have been unhappy with HSBC's decision to scrap its dividend in 2020, which they argue would expose Hong Kong shareholders to requests from other jurisdictions. Some investors, including Christine Fong, a district council member in Hong Kong, have joined calls for shareholders to vote in favor of the proposal to spin off or reorganize HSBC's Asian business.
HSBC is facing pressure from its largest shareholder, Ping An, which holds an 8% stake in the bank. Ping An has backed calls for the bank to rethink its structure and support any initiatives that could boost its stock performance or value.
The bank's recent acquisition of the UK arm of Silicon Valley Bank has also raised questions about due diligence on customers. Critics have questioned whether HSBC looked into the financial statements of SVB's clients, which could impact their ability to repay loans.
Despite these concerns, 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 pushed back on the notion that management hadn't had time to carry out proper due diligence.
Overall, the intense scrutiny from shareholders is likely to continue, with many investors pushing for change at the bank's annual general meeting in May.
At an informal shareholder meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended the bank's current approach to its Asian business, which is seen as the main source of profits. However, many investors are frustrated with the performance of HSBC's businesses outside of Asia and are pushing for a reorganization or spinoff of its Asian operations.
Tucker reiterated that the board recommends voting against a resolution on the agenda for the bank's annual general meeting in May, which would require HSBC to develop a plan to reorganize or spin off its Asian business. He stated that such a move would not be in the best interest of shareholders and would likely result in "materially destroy value" for the company.
Quinn also addressed concerns about the bank's performance outside of Asia, saying that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. However, he acknowledged that a breakup of the bank could lead to significant revenue losses due to the reliance on cross-border transactions.
Shareholders have been unhappy with HSBC's decision to scrap its dividend in 2020, which they argue would expose Hong Kong shareholders to requests from other jurisdictions. Some investors, including Christine Fong, a district council member in Hong Kong, have joined calls for shareholders to vote in favor of the proposal to spin off or reorganize HSBC's Asian business.
HSBC is facing pressure from its largest shareholder, Ping An, which holds an 8% stake in the bank. Ping An has backed calls for the bank to rethink its structure and support any initiatives that could boost its stock performance or value.
The bank's recent acquisition of the UK arm of Silicon Valley Bank has also raised questions about due diligence on customers. Critics have questioned whether HSBC looked into the financial statements of SVB's clients, which could impact their ability to repay loans.
Despite these concerns, 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 pushed back on the notion that management hadn't had time to carry out proper due diligence.
Overall, the intense scrutiny from shareholders is likely to continue, with many investors pushing for change at the bank's annual general meeting in May.
I think it's kinda crazy how one bad move can have such a ripple effect on the whole company... like, remember when HSBC scrapped its dividend back in 2020? 
Now they're facing this huge push from shareholders to spin off their Asian business and I'm just wondering if all this scrutiny is gonna make 'em reevaluate their strategy... 
On one hand, it's great that Ping An is backing the calls for change, but on the other hand, you gotta wonder what's really driving this whole thing... Is it just about boosting stock performance or is there something more to it? 
... and who knows, maybe Ping An will get more value out of their investment 
. The thing is, a breakup would also mean losing some revenue, so that's a risk to consider 
. And what about the due diligence issue with Silicon Valley Bank? That's not ideal 
. But for now, I think HSBC needs to listen to its shareholders and see if they can make some changes 
.
! I gotta say, i'm lovin' the drama goin down at HSBC right now 
! they're gettin' roasted by shareholders over their Asian business strategy and it's like, fair or not? 
some of these investors are straight up frustrated with how things are goin down in asia vs. the rest of the world and i gotta respect that 
But, on the other hand, Ping An does have a pretty big stake in the bank... so maybe they should do some reorganizing to make more shareholders happy 
. And with Ping An bein' such a big shareholder, you'd think they'd have some say-so 
And to make matters worse, they scrapped the dividend like a week ago and now we're supposed to just sit back and trust that everything will magically work out? 
I mean, I get it, investors are getting frustrated, but can't HSBC come up with some actual plans for growth instead of just saying "it's a good business opportunity" and moving on? 
And what about all the critics who think they didn't do proper due diligence on their acquisition of Silicon Valley Bank? That's some major red flags right there... 
mark tucker & noel quinn are defending their strategy but i'm pretty sure some of those profits outside asia are a major problem 
could be bad news for some shareholders but i think its time for hsbc to shake things up 
. And what really gets my goat is that Ping An is backing these calls, but then again, it's like they want to protect their own interests too 
. I'm not saying a breakup is the only solution, but some serious changes need to happen ASAP 
. I mean, come on, scraping that dividend was a huge mistake and now they're trying to spin off the Asian business? It's like they're trying to pass the buck 
. And with Ping An backing those calls, it just shows how out of touch they are with their own investors 
It's no wonder shareholders are pushing for change.
(Source: Citigroup)
