HSBC's top executives are facing intense pressure from shareholders who want the bank to break up its Asian business. At an informal meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their strategy, saying it is working and dividends are moving upwards. However, they faced tough questions from investors who argue that the bank's performance has been dragged down by its businesses in other regions.
Shareholders are unhappy with HSBC scrapping its dividend in 2020, at the request of British regulators, which they say would have exposed Hong Kong shareholders to requests in other jurisdictions. Now, they want the bank to spin off or reorganize its Asian business, citing concerns that it is not performing well enough.
Quinn addressed these complaints head-on, saying that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. However, he also warned that a breakup of the bank would result in significant revenue loss due to cross-border transactions.
The pressure on HSBC comes from its largest shareholder, Ping An, China's biggest insurer, which holds an 8% stake in the bank and has backed calls for the bank to rethink its structure. Ping An's chairman, Huang Yong, said that he will support any initiatives that are conducive to improving HSBC's performance and value.
HSBC's leaders were also asked about the bank's recent acquisition of the British unit of Silicon Valley Bank, which was made just days after SVB's parent company collapsed in the US. Critics have questioned HSBC's ability to perform adequate due diligence on SVB UK's customers.
Despite the pressure, Quinn and Tucker defended the acquisition, calling it a good business opportunity that allowed the bank to gain hundreds of innovative startups as customers. They also pushed back on the notion that management hadn't had time to carry out proper due diligence.
The fate of HSBC's Asian business hangs in the balance, with shareholders set to vote on whether to support a resolution that would force the bank to come up with a plan to spin off or reorganize its Asian business. If approved, the resolution would require 75% of votes, but "nothing is impossible" according to activist shareholder Ken Lui.
As the banking sector continues to face turmoil, HSBC's executives are under intense scrutiny from shareholders who want to see changes made to the bank's structure and strategy. The outcome of this vote will have significant implications for the bank's future and its relationships with investors and regulators.
Shareholders are unhappy with HSBC scrapping its dividend in 2020, at the request of British regulators, which they say would have exposed Hong Kong shareholders to requests in other jurisdictions. Now, they want the bank to spin off or reorganize its Asian business, citing concerns that it is not performing well enough.
Quinn addressed these complaints head-on, saying that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. However, he also warned that a breakup of the bank would result in significant revenue loss due to cross-border transactions.
The pressure on HSBC comes from its largest shareholder, Ping An, China's biggest insurer, which holds an 8% stake in the bank and has backed calls for the bank to rethink its structure. Ping An's chairman, Huang Yong, said that he will support any initiatives that are conducive to improving HSBC's performance and value.
HSBC's leaders were also asked about the bank's recent acquisition of the British unit of Silicon Valley Bank, which was made just days after SVB's parent company collapsed in the US. Critics have questioned HSBC's ability to perform adequate due diligence on SVB UK's customers.
Despite the pressure, Quinn and Tucker defended the acquisition, calling it a good business opportunity that allowed the bank to gain hundreds of innovative startups as customers. They also pushed back on the notion that management hadn't had time to carry out proper due diligence.
The fate of HSBC's Asian business hangs in the balance, with shareholders set to vote on whether to support a resolution that would force the bank to come up with a plan to spin off or reorganize its Asian business. If approved, the resolution would require 75% of votes, but "nothing is impossible" according to activist shareholder Ken Lui.
As the banking sector continues to face turmoil, HSBC's executives are under intense scrutiny from shareholders who want to see changes made to the bank's structure and strategy. The outcome of this vote will have significant implications for the bank's future and its relationships with investors and regulators.
I'm kinda surprised HSBC's top execs are defending their Asian business despite all these concerns from shareholders. Like, if profits in HK & UK aren't being dragged down by underperformance elsewhere, why not just spin off the Asian arm? It'd be a great way to separate the 'good' from the 'bad' investments. 
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. Let's hope HSBC's leaders take this as an opportunity to rethink their strategy and sail towards greener pastures 
! I mean, I can understand why they're mad about not getting their dividend back in 2020... that was a weird move by British regulators. But now they're pushing for the bank to break up its Asian business? That's like saying the whole Asian market is holding them back 
. It doesn't seem too plausible, especially with profits in Hong Kong and the UK being solid. Plus, HSBC just acquired Silicon Valley Bank's UK arm, so can they really afford to spin off their Asian business? I don't know, maybe Ping An knows something we don't 
. The vote is coming up soon, so only time will tell if shareholders get what they want...
I think it's crazy that HSBC is facing pressure to break up its Asian business, especially since profits in HK & UK are actually doing well now 
. It seems like some shareholders just want a way out, but what about the potential disruption to the bank's operations and customer relationships? 
. I'm not sure if HSBC can really claim they did proper due diligence, especially since the parent company collapsed just days before 
. It's clear that the banking sector is in chaos, and HSBC's executives are caught in the middle 
. Can't we have a more nuanced conversation about what's best for HSBC and its customers? 
. But at the same time, if it's not working, maybe it's time to make some changes 
. I wish they could just explain how their Asian business is really doing without getting too caught up in all the numbers 
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. On one hand, I get why shareholders are upset - it seems like HSBC's Asian business has been dragging down their overall performance, and that's gotta be addressed 
. Plus, Ping An is like, super invested in HSBC's future, so I trust their judgment 
. But at the same time, activist shareholder Ken Lui is saying that "nothing is impossible", and I'm just over here thinking "hold up, let's not get ahead of ourselves" 
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. He said it wd be bad 4 HK shareholders cuz of those UK profits 
. But then his mate from econ class said its better 4 the bank cuz they cn make more money elsewhere 
! Maybe dey cud even give us maths nerds some freebies if dey break up the Asian biz 
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. And what's with Ping An backing all these calls for change? Are they just trying to get a better deal out of HSBC? 
. I mean, think about it, they've been dragging profits down with other regions, but now those problems are gone 
. Ping An is totally right on this one, they should be pushing for changes that benefit the bank as a whole. And let's not forget about those Silicon Valley Bank customers, HSBC needs to get their act together on due diligence 
. I'm rooting for Ken Lui and his crew to make sure those shareholders get the changes they're demanding 
. Anything less would be just plain lazy 
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. Ping An, one of their biggest shareholders, is pushing for a breakup or reorg, and I can see why. The bank's performance has been lackluster lately, especially outside of Hong Kong and the UK.
. And don't even get me started on the Silicon Valley Bank acquisition... how could they possibly expect to do due diligence in just days? It's like they're playing with fire 
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. Let's see how this vote goes down and what HSBC comes out with on the other side