HSBC has rejected calls to cut or spin off its Asian business.
The London-headquartered bank has been urged by China’s top shareholder Ping An Insurance Group Co to consider splitting up its Asian business to deliver greater value to shareholders.
The idea is also supported by some retail investors in Hong Kong, and Hong Kong politician Christine Fong, who said on Sunday: “Bringing back the primary listing in Hong Kong is the way to go. to protect the interests of minority shareholders.
“We have suffered the lesson of canceling the 2020 dividend, which is why we strongly support Ping An taking over as HSBC’s director.”
HSBC said outside advisers have reviewed the bank’s strategy and while the results of the reviews have been shared with the board, they will not be made public.
Chief executive Noel Quinn told Reuters news agency on Monday: “Look at the half-year results and you’ll see the value of the current strategy.”
On Monday, the bank reported pre-tax profit of $9.2 billion for the six months ended June 30, down from $10.84 billion a year ago, but well above average estimates. $8.15 billion average from analysts.
HSBC said it will accelerate the restructuring of businesses in the US and Europe and will rely on its global network to drive profitability.
Restore dividends to pre-COVID levels ‘as soon as possible’
“Our strength as well as a well-connected global organization is a key reason why our wholesale customers choose to bank with us, and we are determined to take advantage of them,” said Mr. Quinn. that our network gives us.”
HSBC used to own a 10% stake in Ping An, before selling the stake for a hefty profit in 2012.
Ping An currently owns nearly 10% of the bank’s shares and is China’s most valuable publicly listed insurance company.
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But part of its income comes from HSBC dividends, and the Bank of England banned UK lenders from paying dividends in early 2020, as COVID-19 has become a pandemic.
Even when the dividend was reinstated last year, it was only half the rate the bank had paid so far in 2018.
Meanwhile, the bank’s financial results on Monday showed Asia accounting for 69% of profits in the first half of 2022, compared with 64% a year ago.
Mr. Quinn said: “We understand and appreciate the importance of dividends to all shareholders of this bank.
“We will aim to restore dividends to pre-COVID-19 levels as soon as possible.”
