HSBC's top executives are facing intense pressure from shareholders who want them to consider breaking up the bank. At an informal shareholder meeting in Hong Kong, Chairman Mark Tucker and CEO Noel Quinn defended their strategy, but acknowledged that the board is unanimous in its opposition to a resolution calling for the bank to spin off or reorganize its Asian business.
Shareholders, including small investors who rely on the dividend payments to make ends meet, are frustrated with the bank's performance and want to see it split into separate entities. They argue that the London-based lender's businesses in other regions are dragging down the company's overall performance.
Quinn addressed these concerns by saying that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. However, pressed on the issue, he warned that a breakup would result in significant revenue loss due to the reliance on cross-border transactions.
HSBC is facing pressure from its largest shareholder, Ping An, which holds an 8% stake in the bank. While Ping An has not recommended a specific path forward, it will support any initiatives that could boost the stock performance or value.
The bank's leaders were also asked about its recent acquisition of the British unit of Silicon Valley Bank (SVB UK) for £1 ($1.20). Critics have questioned HSBC's ability to carry out adequate due diligence on SVB UK's customers, and whether they looked into their financial statements to determine if they could pay back the loan.
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 pushed back on the notion that management hadn't had time to carry out proper due diligence.
The situation highlights the turmoil in the banking sector, with recent collapses and takeovers affecting share prices across the industry. Tucker said he did not expect an "immediate impact" on HSBC's performance, but acknowledged that there would be a period of uncertainty before nerves settled.
For now, it seems that HSBC's top executives will continue to defend their strategy, but the pressure from shareholders and regulators is likely to remain intense.
Shareholders, including small investors who rely on the dividend payments to make ends meet, are frustrated with the bank's performance and want to see it split into separate entities. They argue that the London-based lender's businesses in other regions are dragging down the company's overall performance.
Quinn addressed these concerns by saying that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. However, pressed on the issue, he warned that a breakup would result in significant revenue loss due to the reliance on cross-border transactions.
HSBC is facing pressure from its largest shareholder, Ping An, which holds an 8% stake in the bank. While Ping An has not recommended a specific path forward, it will support any initiatives that could boost the stock performance or value.
The bank's leaders were also asked about its recent acquisition of the British unit of Silicon Valley Bank (SVB UK) for £1 ($1.20). Critics have questioned HSBC's ability to carry out adequate due diligence on SVB UK's customers, and whether they looked into their financial statements to determine if they could pay back the loan.
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 pushed back on the notion that management hadn't had time to carry out proper due diligence.
The situation highlights the turmoil in the banking sector, with recent collapses and takeovers affecting share prices across the industry. Tucker said he did not expect an "immediate impact" on HSBC's performance, but acknowledged that there would be a period of uncertainty before nerves settled.
For now, it seems that HSBC's top executives will continue to defend their strategy, but the pressure from shareholders and regulators is likely to remain intense.
. They're just trying to get a steady income from their investments and now they're worried about HSBC's future 
. It's not fair that they have to deal with all this uncertainty, especially when the bank's top execs seem so disconnected from the average investor 
. And what's with Ping An holding an 8% stake in the bank? Shouldn't they be advocating for the shareholders' interests instead of just pushing for profits? 
... I mean, who wouldn't want to tap into all those startups for innovative ideas? But at what cost? People are worried about the bank not doing due diligence properly. You feel me? It's like HSBC is playing with fire 
, and if they don't watch out, it could be a whole lot worse.
... shareholders just want to see some results, but at the same time, there's this risk of breaking up the bank. It's like a big puzzle with lots of pieces that need to fit together 
. Not sure what the outcome is gonna be yet, but one thing's for sure - it's gonna be a wild ride!
So I'm reading this news about HSBC & I gotta say, the whole situation is CRAZY 
These shareholders are HUNGRY for a solution to boost profits, but the top execs are all like "nope, we're good" 
. I mean, I get it, breaking up the bank could be a major move, but at what cost? 
It's all about making deals, but I guess sometimes you gotta ask yourself if it's worth the risk 
. And now Ping An, which owns 8% of the bank, is like "hey, we got your back"... but only if it means boosting those stock prices 
... meanwhile, HSBC's buying up SVB UK and no one knows what they're really getting themselves into 
. Banking sector all over the place right now, just waiting for another collapse or takeover 
. Can't say I'm feeling optimistic about this one 
. i think what ping an wants is for hsbc to look into ways to boost its value, whether it's through splitting up or reorganizing. meanwhile, hsbc's recent acquisition of svb uk has raised some eyebrows... how could they not do more due diligence on their customers' finances 
.
. They're not just relying on dividend payments anymore, they need to make a profit from their core business. It's like trying to fix a house with a leaky roof, you gotta address the underlying issues before you can start making repairs 
. Everyone's trying to navigate these choppy waters and it's only going to get more complicated from here 
.
I mean, its not like they're getting paid to sit around and watch their investments fizzle out. The idea of breaking up a huge bank with tons of interconnected businesses just seems super complicated... 
.
. I'm not convinced that breaking up the bank is the answer, but at the same time, I don't see how they can keep things as is either 
. It's a tough spot for HSBC and its leadership.
. The recent SVB UK acquisition has some people scratching their heads, but I guess that's just part of the game 
, it's like trying to fold a fitted sheet while balancing on one leg... anyhoo, gotta wonder what ping an's game plan is, maybe they're secretly counting on the bank going bankrupt so they can buy it cheaply 
. The bank's leaders are defending their strategy but I get why shareholders are pressing for change 
. It's all about timing and whether the bank can execute proper due diligence on new acquisitions 
.
. HSBC's situation highlights the challenges they're facing but also the pressure from shareholders and regulators is likely to keep building 
.
Do they have to deal with a bunch of different banks? It sounds like a lot of work. 
And what about the smaller investors who rely on those dividend payments? They might not be able to get their money out as easily if there's a breakup.