HSBC shareholders have rejected a proposal backed by its largest investor, Ping An, to spin off its Asian operations, which account for nearly half of its revenue. The bank's management had urged shareholders to vote against the proposal, arguing that being global is central to its strategy and that a spinoff would mean losing revenue. Ping An and some other investors have criticized HSBC for not doing enough to bolster its China-facing businesses and for siphoning off money from them to buttress slower-growing operations in the West.
HSBC's biggest shareholder, Chinese insurer Ping An, failed to gain support from other major shareholders to split the bank during its annual general meeting. Ping An, which holds an 8% stake in HSBC, has been trying to separate the bank's profitable Asian business from other parts of the bank that are not performing as strongly. HSBC chairman Mark Tucker said the result "draws a line" under a long-running debate about the bank's structure.
HSBC shareholders have rejected a proposal backed by Ping An Insurance to split the bank into two entities, one based in Asia and the other in Europe. The proposal was put forward at the bank's annual general meeting (AGM) but failed to gain enough support from shareholders.
Shareholder advisory group ISS has advised HSBC investors to vote against a resolution by its biggest shareholder Ping An, calling on the bank to consider strategic options including a spinoff of its Asia business. ISS said the proposal by Ping An "lacks detailed rationale". The bank and the Chinese insurer have been arguing over the issue since last November. Shareholders will vote on proposals including the strategic review and whether the bank should be forced to boost dividends at the annual general meeting on May 5.
