Shareholders pressure HSBC executives to consider corporate breakup

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At an informal shareholder meeting in Hong Kong, HSBC’s top brass defended their strategy to shareholders in the lender’s largest market. The Chairman and CEO reiterated the board’s recommendation to vote against a resolution that would force the bank to reorganize its Asian business. They emphasized the success of their current strategy in moving dividends up and expressed confidence in the bank’s performance.

HSBC has been under pressure to separate its Asian business, but shareholders were informed that profits in Hong Kong and the UK are no longer being dragged down by underperformance elsewhere. The board argued that splitting the bank would result in significant revenue loss due to cross-border transactions.

Despite facing criticism for scrapping dividends in 2020, HSBC is now working on improving its dividend payment structure. Shareholders in Hong Kong are pushing for the bank to spin off its Asian business to protect their interests. An activist shareholder is leading the charge and gathering support for the proposal.

The bank’s largest shareholder, Ping An, has also expressed support for restructuring HSBC to improve performance and value. The insurance giant believes that exploring a spinoff of the Asian business could enhance stock performance and simplify regulatory obligations globally.

HSBC’s recent acquisition of Silicon Valley Bank’s UK arm raised questions about due diligence on SVB UK’s customers. However, the bank’s leaders defended the purchase, stating it was a good opportunity to gain innovative startups as customers. They reassured shareholders about the impact of recent industry developments, expressing confidence in the bank’s resilience.

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