A branch of HSBC Bank is seen August 3, 2009 in central London. REUTERS/Stefan Wermuth
LONDON/SINGAPORE, April 29 – HSBC Holdings’ (HSBA.L) largest shareholder, Chinese insurance giant Ping An (601318.SS), has called for the London-based bank to be wound up, a source knows the matter said on Friday.
Ping An has outlined its plan to split the company to the board of HSBC, according to previous media reports, which also quoted people familiar with the matter.
“Ping An supports any reform proposals from investors that can help HSBC’s operations and long-term value creation,” a spokesman said on Saturday.
HSBC did not comment on Ping An’s involvement but defended its overall strategy in a statement on Friday. “We believe we have the right strategy and are focused on executing it,” a bank spokesman said via email.
The plan would unlock greater value for HSBC shareholders by separating operations in Asia, where the bank makes most of its money, from other parts of its business, the reports said.
CEO Noel Quinn, who has led HSBC for more than two years, has doubled in Asia, moving global executives there and investing billions of dollars in the lucrative wealth management business, with a focus on the region.
Some analysts have also called for HSBC to split up its global business, arguing that the bank makes most of its money in Asia and that its global network incurs costs without bringing enough benefits.
HSBC navigates the escalating political tensions between China, Europe and the United States.
“The proposal makes some sense in the political context, but HSBC benefits from gaining a foothold in both the West and Asia,” Goodbody banking analyst John Cronin said on Friday.
Reuters reported last year that Beijing was frustrated with HSBC over thorny domestic and international legal and political issues, from China’s crackdown on Hong Kong to the US indictment of an executive at Chinese national tech champion Huawei Technologies. The executive was dismissed last September.
In 2016, the bank decided to keep its headquarters in London, turning down the option to refocus to its main revenue-generating hub, Hong Kong, after a 10-month review.
HSBC generated 52% of total sales of $49.6 billion in Asia last year and 65% of reported pre-tax profit in the region, with Hong Kong being the largest market. The bank is listed in both London and Hong Kong.
According to data from Refinitiv, Ping An owned 8.23% stake in the banking giant as of Feb. 11.
British media reports first described the plan last week without naming the shareholder.
Reporting by Lawrence White in London and Anshuman Daga in Singapore; Additional reporting by Iain Withers in London, Radhika Anilkumar in Bengaluru and Selena Li in Hong Kong; Edited by Arun Koyyur, Louise Heavens and William Mallard