Shareholders in HSBC, the European financial giant, voted on Friday to reject an investor proposal meant to pressure the bank into breaking off its lucrative Asian operations.
That initiative — backed by HSBC’s largest investor, the sprawling Chinese insurer Ping An — received only about 20 percent of the votes, the company said. A companion proposal backed Ping An, to restore the bank’s dividend to prepandemic levels, was also defeated.
The vote was a show of support for HSBC’s management, which had urged shareholders to vote no. It was announced by the bank’s chairman, Mark Tucker, at the annual shareholder meeting Friday in Birmingham, England.
The bank’s leaders have repeatedly rejected calls to separate its Hong Kong-based business, which accounts for nearly half of its revenue.
“Being global is how we generate a significant portion of our revenues and is central to our whole strategy,” Mr. Tucker said in a statement. “A restructuring or spinoff would mean that we lose this revenue as our bank would no longer have the connectivity which our customers value.”
With nearly $3 trillion in assets, HSBC is among the 10 largest global banks. And with one of the strongest presences in Asia of any Western lender, the firm is considered well positioned to benefit as China’s economy rebounds from pandemic lockdowns. The lender in recent years has sought to focus more on its Hong Kong and mainland China operations, including by moving to sell businesses in less important markets.
But to Ping An and some other investors, the bank has not done enough to bolster its China-facing businesses, and has instead siphoned off money from them to buttress slower-growing operations in the West. The insurer is also worried about the firm being hurt by geopolitical tensions between China and the West.
Over the past year, Ping An — a behemoth in its own right, as the world’s largest insurance firm — has privately and then publicly pressured HSBC to break off the Asian business in some way. Last month, it publicly backed shareholder initiatives that would force the firm to regularly review its global structure, as well as to return its dividend to prepandemic levels.
HSBC executives dismissed the initiatives as shortsighted and risky, and urged investors to reject them. They were supported by several proxy advisory firms, which counsel investors on how to vote in corporate elections and often have sway among shareholders.
Source: New York Times
