Ping Is Rejected By Hsbc, A Break-up Call Promises A Greater Dividend
By Selena Li and Anshuman Daga
SINGAPORE (Reuters) – On Tuesday, the leaders of Europe’s biggest bank, HSBC, will meet with retail investors in Hong Kong, which is the bank’s biggest market. They will try to persuade the investors that their plan to act as a global bank is important to boosting growth.
The company’s biggest shareholder, Ping An Insurance Group Co., Ltd., wants the company, which is based in London, to look into ways to increase shareholder returns, such as spinning off its mainstay Asia business.
The meeting was held informally to talk about earnings and strategy. It came a day after HSBC turned down the break-up call, beat profit forecasts, and promised bigger dividends, which sent its Hong Kong-listed shares to their highest level in a month.
Ping An has been buying HSBC shares since 2017, when the bank’s share price was about a third higher. The company has said in public that it supports all reform proposals that could help HSBC Holdings PLC’s long-term value go up.
As of the beginning of February, the insurance company owned 8.23% of HSBC. Local investors are also asking for a change in strategy.
Ken Lui, who started an HSBC shareholder group, said, “Retail shareholders would welcome any proposals that change the status quo or make investors more confident in management.”
“But why am I speaking up and supporting the idea for a spin-off? “Because I don’t trust the people in charge,” he said.
During the COVID-19 pandemic in 2020, a group of shareholders asked HSBC to bring back its dividend payment, which had been stopped after the Bank of England asked lenders to do so.
Since Ping An’s plans were made public in April, HSBC’s comments on Monday were its most direct defence.
Shenzhen Investment Holdings Co, which is owned by the Chinese government, is the insurer’s second-biggest shareholder. Central Huijin Investment, which is also owned by the Chinese government, is one of the top five shareholders, according to company documents.
A Hong Kong politician has also asked HSBC to put people from Ping An on its board of directors.
After a 10-month review, HSBC decided in 2016 to keep its headquarters in London instead of moving it back to Hong Kong, where it made most of its money.
(Selena Li and Anshuman Daga did the reporting, and Christopher Cushing did the editing)