By Josh Mitchell
LONDON (Dow Jones) — British bank HSBC is getting pressure from its largest shareholder. The Chinese insurance company Ping An, which has an 8.3 percent stake in HSBC plc, is calling for a radical restructuring of the group, including a possible sale of large parts of the company, in order to increase profits and boost the share price.
“As one of HSBC’s largest shareholders, we are extremely concerned about its performance, dividends and market capitalization,” wrote Huang Yong, Chairman of Ping An Asset Management. “HSBC’s performance is well below that of its peer group and well below the expectations of most shareholders.”
The shareholder called for cutting costs and accelerating the relocation of capital and personnel to Asia. He would also support a spin-off of parts of the company.
The Chinese insurer has been campaigning for changes at HSBC for months. So far, however, he has not presented his demands publicly. Through external consultants, Ping An had proposed spinning off the bank’s Asia business, which contributes the lion’s share of the group’s profits, from the rest of the company.
Ping An has held a stake in HSBC since 2015. Tensions mounted when the bank suspended its dividend in 2020 following demands from UK regulators. Since then, it has returned to paying dividends, but they have not been as high as before the pandemic. It’s also cutting costs and focusing more on Asia while downsizing its business in North America and parts of Europe.
A statement from the bank said Yong’s criticism was based on statistics that exclude performance over the past few quarters. “We are looking very closely at costs by increasing efficiency in the organization,” the bank said. “We remain on track to meet all of our financial targets.
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November 04, 2022 12:54 ET (16:54 GMT)
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