HSBC: Chinese shareholder Ping An calls for a split

Posted Apr 29, 2022, 7:14 PMUpdated on Apr 29, 2022 at 7:29 PM

Founded in Hong Kong, based in London, with more than half of its income in Asia, HSBC is forced to choose. According to the “Financial Times”, its main shareholder, the Chinese insurance giant Ping An, calls for the dismantling of the Sino-British bank, torn between its interests in Asia and the West.

The Chinese group is said to have presented to the bank’s executive committee a plan to list the most profitable business in Asia on the stock exchange, with the aim of seeing it controlled by a local executive and gaining autonomy in decision-making. Ping An was an 8% shareholder of HSBC at the end of 2021, according to the annual report. The split of Prudential, between its European and international activities, could be an example.

“Good strategy”

HSBC has not directly confirmed these discussions. In a statement, however, the bank defended its strategy: “HSBC is committed to maximizing value for all of its shareholders. We believe we have the right strategy and we are focused on implementing it,” said a spokesperson, adding that the bank has one of the best stock performances in the world in the banking sector, its share price having exceeded 60% in the last year the Hang Seng index of the Hong Kong Stock Exchange.

Strategic questions about HSBC are not new. Its chairman Mark Tucker has in the past rejected calls for a split, while the bank regularly finds itself at the heart of tensions between China and the West. But Ping An would consider this balancing act increasingly difficult, especially given the Russian invasion of Ukraine and the increasingly divergent geopolitical interests between Beijing and the West.

The previous Huawei

The first difficulties appeared in 2018, during the arrest of Meng Wanzhou, the financial director of Huawei, in Vancouver, accused by American justice of having circumvented American sanctions against Iran. The Chinese authorities accuse HSBC of having delivered documents which would have allowed this arrest. The former leader has since returned to China.

The tension escalated further when China’s national security law was passed in 2020. Under pressure, HSBC ended up supporting this law, which hindered Hong Kong’s autonomy, thus breaking with the adopted neutrality. so far. The bank then drew the wrath of members of the House of Commons, some of whom vehemently denounce Beijing’s intrusion into British affairs.

During a hearing in parliament, the boss of HSBC, Noël Quinn, had been summoned to explain this position and the freezing of the accounts of several activists opposed to the Chinese government. At the time, he explained that it was not “his role to take a moral position”. “I can’t pick and choose which laws to follow or not,” he defended himself.

He had formally ruled out leaving the Asian spot. “We have been in Hong Kong for 155 years,” said Noel Quinn. I want to continue to help Hong Kong develop. We have a commitment to Hong Kong people.”

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