Chinese make fresh call for HSBC breakup: Beijing-backed insurer Ping An goes public for the first time
The Chinese HSBC agitator has publicly called for the bank to be split – just weeks after boss Noel Quinn said the deal was ‘closed’.
Ping An, the Beijing-backed insurer, is also pushing HSBC to pursue “much more aggressive” cost-cutting.
It is the latest salvo in a battle between the bank and its largest shareholder that has been going on for most of this year.
Pushed back: HSBC chairman Mark Tucker opposed a spin-off
Ping An revealed privately to HSBC in February that he wanted the bank to separate its Asian business from its Western operations, saying they were holding back the banking giant’s performance. HSBC hit back, arguing that the group’s strength lay in being a global company capable of uniting East and West.
Asked about the breakup proposals last month, Quinn, chief executive of HSBC, said talks on the subject were “closed”.
But in an interview with the Financial Times, Michael Huang, chairman of Ping An Asset Management, said: “We will support all initiatives, including a spin-off, that are conducive to improving HSBC’s performance and value. ”
Sources close to the Chinese company said it was still pushing to split HSBC and talks were “ongoing”.
Ping An – founded in 1988 and based in Shenzhen – justified its calls for the breakup by pointing to years of lackluster share price growth at the lender and the cancellation of its dividend during the Covid-19 pandemic – a policy that was applied by the Bank of England. But Quinn and Mark Tucker, chairman of HSBC, have urged investors to stick to their plan, which has seen the bank give up non-core parts of its business in countries including France and Brazil.
They are also looking to reduce costs, in particular through a program of 35,000 job cuts.
An HSBC spokesman said last night: ‘We remain on track to achieve all of our financial targets, including a return on tangible equity of at least 12%, from 2023.’
Nonetheless, Huang said it was “urgent” for HSBC to go further.
The lender needed to “be much more aggressive in radically cutting costs”, he added, saying cuts could be made in “labour and IT”.
Huang told reporters: “This is the most important, urgent and necessary action for HSBC to improve its business performance, reducing costs and increasing efficiency, especially in a context of slowing growth in the global financial sector.”
While critics say the push for change at the bank is driven by Chinese government officials and their desire to get their hands on the Asian parts of the London-based lender,
HSBC denied that was the case. Yesterday, HSBC shares jumped 5.8%, or 26.85p, to 490p.