HSBC’s top execs face tense shareholders calling for a breakup | CNN Business

HSBC's top executives are facing intense pressure from shareholders to break up the bank amid concerns that its Asian business is dragging down profits in other regions. The lender's largest market, Hong Kong, where HSBC has a significant presence, saw the chairman and CEO address frustrated investors on Monday.

According to Chairman Mark Tucker and CEO Noel Quinn, the board has unanimously opposed a resolution that would force HSBC to come up with a plan to spin off or reorganize its Asian business, which generates most of the bank's profits. They argued that such a move would not be in shareholders' interest, stating that it would "materially destroy value for shareholders," including dividends.

However, small shareholders who relied on the dividend to pay their regular expenses are calling for the bank to spin off its Asian business, citing concerns over the impact of underperformance elsewhere. Activist shareholder Ken Lui has joined forces with these investors, urging them to support a proposal that would require 75% of votes to be passed in May.

The pressure on HSBC comes from both within and outside the company. Ping An, China's largest insurer, which holds an 8% stake in the bank, has backed calls for the bank to rethink its structure, citing a desire to improve performance and value. However, the insurance giant's views haven't changed since November, according to a person familiar with the matter.

The bank's recent acquisition of SVB UK, a British unit of Silicon Valley Bank, which collapsed in the US, has also raised concerns about due diligence. Critics have questioned whether HSBC thoroughly reviewed the financial statements of SVB UK's customers before making the deal.

In response, 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.

so this whole HSBC thing is getting pretty wild . like, I'm not sure what's more surprising - the fact that shareholders are freaking out about the bank's Asian business or that Ping An is backing them up . but for real, it makes sense why they'd want to shake things up - if the Asian market is dragging down profits, maybe it's time to separate those eggs from the rest of the basket .

I'm curious to see how this whole spin-off thing plays out - will we see a new, more efficient HSBC? or just another banking drama . one thing's for sure, though: it'll be interesting to keep an eye on what happens next

OMG, this is getting intense! HSBC is literally caught between pleasing its huge shareholders who want it to break up and those small investors who rely on the dividend . I mean, can you blame them though? The Asian business is killing profits in other regions . But at the same time, activists are saying that spinning off the business would be a total disaster for shareholders .

And what's even more interesting is the pressure coming from Ping An, China's largest insurer . They're like "hey, you guys need to rethink your structure" . I'm curious to see how this all plays out in May. Will they manage to get that 75% vote and break up the bank? Or will HSBC find a way to keep its Asian business intact? The drama is real!

I'm kinda surprised they're pushing back like this ... I mean, you can understand why they wouldn't want to spin off their Asian business, but at the same time, it's got a huge impact on profits overall, and those regular dividend payments for small shareholders aren't gonna cut themselves . It's all kinda a big mess, really. And what with Ping An being so vocal about restructuring, I'm not sure who's right or wrong here... Maybe they just need to take a step back, re-evaluate their strategy, and see if there's a way to make it work for everyone?

Omg what's going on with HSBC they're being super pressured by shareholders to break up their Asian business but the CEO & chairman are all like "nope can't do it" it's crazy how some small shareholders who rely on dividends are calling for change, I feel for them, they must be so stressed meanwhile, Ping An is backing the idea of rethinking the bank's structure that's a bit more interesting, wonder if HSBC will actually listen to the pressure

I gotta say, this HSBC thing is kinda wild . Like, I get why shareholders are salty about the Asian business dragging down profits, but at the same time, it's not like they're trying to cut off their nose to spite their face . I mean, if spinning off the Asian arm is really what's needed to boost growth elsewhere, then I'm all for it .

But, on the other hand, some of these small shareholders are really struggling because of those dividend payments . It's like, they're already living paycheck to paycheck, and then you take away their income source? That's gotta be super tough . And then there's Ping An, which is like a major player in the Chinese insurance scene... I don't know if backing calls for restructuring is really the best move for them .

Lastly, that acquisition of SVB UK was super shady . Like, how can you just rush into a deal without doing your due diligence? That's gotta be a huge red flag . I'm all for taking risks and innovating, but not when it comes at the expense of our own safety nets .