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As the results of the vote come in, HSBC chairman Mark Tucker may finally declare victory at the end of a fractious annual general meeting in Birmingham this month.
Tucker had a difficult year in a war of words with HSBC’s largest shareholder, Chinese insurer Ping An, which became active at the bank’s last AGM with demands to split the 158-year-old bank in two.
However, despite its persistent and attention-grabbing campaign, the vote confirmed that Ping An had failed to garner support from any of HSBC’s other large institutional shareholders. A special proposal for an East–West break-up, supported by Ping An, failed, winning 20 percent, far short of the 75 percent needed for success.
The win brought breathing room for Tucker and HSBC. But it failed to answer the most important question that determines what happens next: Was Ping An’s intervention directed or tacitly approved by Beijing?
The call to split the bank in two “did not make clear business sense” but “risked politics making HSBC an unviable business”, said Hugh Young, Asia-Pacific president of UK asset manager Aberdeen, an HSBC shareholder. He said investors were “speculating in the dark” on Beijing’s involvement.
After the AGM, Ping An softened its stance, moving on from allegations that HSBC was exaggerating the “costs and risks” of closing its Asian operations, adding that it would “protect shareholders”. respects the choice” and advises the management to “listen to the shareholders”. ‘Suggestion with an open mind’.
People close to HSBC say the new tone indicates Ping An may be ready to scale down its campaign. He points out that the bank’s share price has risen 24 per cent in the last year, while the FTSE index has risen 4 per cent.
But there are indications that it is too early to assume that divestment is off the table. HSBC has long been mired in tensions between the US and China, a position impossible to maintain, Ping An has argued.
“This is a discussion that isn’t going to end,” said Michael McDaid, an equity analyst at Morningstar. If the bank produces strong results this year, with higher interest rates driving profits, “we’re probably not going to have a big struggle . . . but if the returns aren’t satisfactory it will back right up”.
A year into his campaign, Ping An can already claim a few victories.
HSBC has responded to its pressure by sharply cutting costs and handing over payments to shareholders. It has agreed a $10.1 billion deal to sell its Canadian business – which will pay a special 21 per cent dividend when finalized next year – and has already agreed to exit operations in Greece, Russia and the US Is.
A planned sale of its retail network in France to private equity group Cerberus may have fallen apart, but the bank’s chief financial officer Georges Elhedry told Reuters this week it was considering selling or scaling back businesses in 12, unspecified countries. .
HSBC has also tweaked executive pay to link it more closely with performance in Asia, and committed to paying dividends on a quarterly basis instead of once or twice a year, as it did during the pandemic was a key demand from some shareholders in Asia who had historically behaved Stable dividends as an almost bond-like source of income.
An HSBC spokesman said: ‘Our performance shows that our strategy is working.’ “We are generating strong returns for our shareholders, and we are confident about the future.”
Backed by Beijing?
HSBC chief executive Noel Quinn has consistently denied that Ping An’s campaign was politically motivated.
HSBC executives have been reassured by senior officials in China and Hong Kong that the dispute is seen as commercial, not political – they take comfort from the fact that it has won additional financial licenses and joint ventures on the mainland. Has been approved to take full control. including Fund Management Operations In May.
The bank’s leadership, including Tucker and Quinn, have also been allowed to hold meetings with various deputy chiefs and ministers this year, many of which have been covered by domestic media and photos published on WeChat as an official seal of approval. taken in.
A senior person at the lender said, “When the Chinese are treating you as a foreigner, they slow down applications for licenses, delay hiring approvals, ban branch openings And you see your teammates getting treated better.”
HSBC experienced that treatment after providing key information to US prosecutors pursuing the case against Huawei and its chief financial officer Meng Wanzhou, who was arrested in Canada in 2017. He was later released in 2021 after admitting to defrauding lenders to violate sanctions against Iran.
During that time “we saw some slow response times to things, everything was pulled, we were definitely in the doghouse, not the favorite child”, the senior person said. “But we just don’t see it.”
But shareholders, rivals and even some HSBC executives have said privately that Beijing’s involvement – or at least support – cannot be ruled out.
“HSBC is clearly a big Western symbol. . . (the message is) ‘don’t get too comfortable’,” said a person close to the bank.
A senior HSBC official said, “It’s much more complicated than saying, ‘It’s coming down from Beijing’.” But the insurer “may get tacit, ‘no objections’ from political bodies to go ahead”.
local fight
A local campaign group that has the same aims as Ping An shows no sign of backing down, spin-off HSBC Now, which says it represents retail shareholders in Asia, has called on the Ping An-backed bank to be split. Filed unsuccessful AGM resolution.
Its figurehead is investor Ken Lui, 42, who, according to his spokesman, made his money from the property. “We will certainly (present the resolution) again next year,” he said in an interview with the Financial Times. “If the performance does not improve, we will ask (the chairman and CEO) to step down.”
Lui, who traveled to Birmingham for the AGM, said he video-called with Ping An for the meeting, in which the insurers agreed to vote for his proposals. But he denied that he had received any financial backing from Ping An and said the campaign was funded by profits from HSBC’s rising share price.
Christine Fong, a Hong Kong district councilor for Professional Power, a group she describes as politically independent, is continuing to battle with Lui.
“We still support the spin-off of the Asian business,” she told the FT, adding that she wanted Ping An to have “adequate representation” on HSBC’s board. She said she had not been in contact with Ping An for over a year and had not received any financial support from the group.
“The AGM was a good start,” she said. “We have about 20 percent, so I think every year we’ll probably have a resolution, especially if the performance is down.”
Ping An has been silent since its brief statement following the AGM debacle, and declined to comment for this story.
One option could be for the insurer to hold executives’ feet to the fire as it narrows its focus, increasing the pressure to hire more senior executives and board members from the ranks of the Asia business, rather than just a few. Hong Kong to relocate senior Western bankers.
Senior executives at rival banks in Hong Kong wonder whether Ping An might aim for a symbolic victory, such as calling on HSBC to move its global headquarters to Hong Kong. The headquarters were moved to London in the early 1990s, when HSBC acquired Midland Bank.
Ping An’s next move may shed light on its motives.
Some senior HSBC executives believe that if a defeated Ping An continues to argue for splitting up the bank – despite losing a major vote and winning a financial advantage – it will “suggest that this return-on- politically motivated rather than inspired by the Capitol”.
[ad_1]
As the results of the vote come in, HSBC chairman Mark Tucker may finally declare victory at the end of a fractious annual general meeting in Birmingham this month.
Tucker had a difficult year in a war of words with HSBC’s largest shareholder, Chinese insurer Ping An, which became active at the bank’s last AGM with demands to split the 158-year-old bank in two.
However, despite its persistent and attention-grabbing campaign, the vote confirmed that Ping An had failed to garner support from any of HSBC’s other large institutional shareholders. A special proposal for an East–West break-up, supported by Ping An, failed, winning 20 percent, far short of the 75 percent needed for success.
The win brought breathing room for Tucker and HSBC. But it failed to answer the most important question that determines what happens next: Was Ping An’s intervention directed or tacitly approved by Beijing?
The call to split the bank in two “did not make clear business sense” but “risked politics making HSBC an unviable business”, said Hugh Young, Asia-Pacific president of UK asset manager Aberdeen, an HSBC shareholder. He said investors were “speculating in the dark” on Beijing’s involvement.
After the AGM, Ping An softened its stance, moving on from allegations that HSBC was exaggerating the “costs and risks” of closing its Asian operations, adding that it would “protect shareholders”. respects the choice” and advises the management to “listen to the shareholders”. ‘Suggestion with an open mind’.
People close to HSBC say the new tone indicates Ping An may be ready to scale down its campaign. He points out that the bank’s share price has risen 24 per cent in the last year, while the FTSE index has risen 4 per cent.
But there are indications that it is too early to assume that divestment is off the table. HSBC has long been mired in tensions between the US and China, a position impossible to maintain, Ping An has argued.
“This is a discussion that isn’t going to end,” said Michael McDaid, an equity analyst at Morningstar. If the bank produces strong results this year, with higher interest rates driving profits, “we’re probably not going to have a big struggle . . . but if the returns aren’t satisfactory it will back right up”.
A year into his campaign, Ping An can already claim a few victories.
HSBC has responded to its pressure by sharply cutting costs and handing over payments to shareholders. It has agreed a $10.1 billion deal to sell its Canadian business – which will pay a special 21 per cent dividend when finalized next year – and has already agreed to exit operations in Greece, Russia and the US Is.
A planned sale of its retail network in France to private equity group Cerberus may have fallen apart, but the bank’s chief financial officer Georges Elhedry told Reuters this week it was considering selling or scaling back businesses in 12, unspecified countries. .
HSBC has also tweaked executive pay to link it more closely with performance in Asia, and committed to paying dividends on a quarterly basis instead of once or twice a year, as it did during the pandemic was a key demand from some shareholders in Asia who had historically behaved Stable dividends as an almost bond-like source of income.
An HSBC spokesman said: ‘Our performance shows that our strategy is working.’ “We are generating strong returns for our shareholders, and we are confident about the future.”
Backed by Beijing?
HSBC chief executive Noel Quinn has consistently denied that Ping An’s campaign was politically motivated.
HSBC executives have been reassured by senior officials in China and Hong Kong that the dispute is seen as commercial, not political – they take comfort from the fact that it has won additional financial licenses and joint ventures on the mainland. Has been approved to take full control. including Fund Management Operations In May.
The bank’s leadership, including Tucker and Quinn, have also been allowed to hold meetings with various deputy chiefs and ministers this year, many of which have been covered by domestic media and photos published on WeChat as an official seal of approval. taken in.
A senior person at the lender said, “When the Chinese are treating you as a foreigner, they slow down applications for licenses, delay hiring approvals, ban branch openings And you see your teammates getting treated better.”
HSBC experienced that treatment after providing key information to US prosecutors pursuing the case against Huawei and its chief financial officer Meng Wanzhou, who was arrested in Canada in 2017. He was later released in 2021 after admitting to defrauding lenders to violate sanctions against Iran.
During that time “we saw some slow response times to things, everything was pulled, we were definitely in the doghouse, not the favorite child”, the senior person said. “But we just don’t see it.”
But shareholders, rivals and even some HSBC executives have said privately that Beijing’s involvement – or at least support – cannot be ruled out.
“HSBC is clearly a big Western symbol. . . (the message is) ‘don’t get too comfortable’,” said a person close to the bank.
A senior HSBC official said, “It’s much more complicated than saying, ‘It’s coming down from Beijing’.” But the insurer “may get tacit, ‘no objections’ from political bodies to go ahead”.
local fight
A local campaign group that has the same aims as Ping An shows no sign of backing down, spin-off HSBC Now, which says it represents retail shareholders in Asia, has called on the Ping An-backed bank to be split. Filed unsuccessful AGM resolution.
Its figurehead is investor Ken Lui, 42, who, according to his spokesman, made his money from the property. “We will certainly (present the resolution) again next year,” he said in an interview with the Financial Times. “If the performance does not improve, we will ask (the chairman and CEO) to step down.”
Lui, who traveled to Birmingham for the AGM, said he video-called with Ping An for the meeting, in which the insurers agreed to vote for his proposals. But he denied that he had received any financial backing from Ping An and said the campaign was funded by profits from HSBC’s rising share price.
Christine Fong, a Hong Kong district councilor for Professional Power, a group she describes as politically independent, is continuing to battle with Lui.
“We still support the spin-off of the Asian business,” she told the FT, adding that she wanted Ping An to have “adequate representation” on HSBC’s board. She said she had not been in contact with Ping An for over a year and had not received any financial support from the group.
“The AGM was a good start,” she said. “We have about 20 percent, so I think every year we’ll probably have a resolution, especially if the performance is down.”
Ping An has been silent since its brief statement following the AGM debacle, and declined to comment for this story.
One option could be for the insurer to hold executives’ feet to the fire as it narrows its focus, increasing the pressure to hire more senior executives and board members from the ranks of the Asia business, rather than just a few. Hong Kong to relocate senior Western bankers.
Senior executives at rival banks in Hong Kong wonder whether Ping An might aim for a symbolic victory, such as calling on HSBC to move its global headquarters to Hong Kong. The headquarters were moved to London in the early 1990s, when HSBC acquired Midland Bank.
Ping An’s next move may shed light on its motives.
Some senior HSBC executives believe that if a defeated Ping An continues to argue for splitting up the bank – despite losing a major vote and winning a financial advantage – it will “suggest that this return-on- politically motivated rather than inspired by the Capitol”.
