AIRLINK 75.18 Increased By ▲ 0.33 (0.44%)
BOP 5.01 Increased By ▲ 0.03 (0.6%)
CNERGY 4.51 Increased By ▲ 0.02 (0.45%)
DFML 41.86 Increased By ▲ 1.86 (4.65%)
DGKC 86.75 Increased By ▲ 0.40 (0.46%)
FCCL 21.50 Increased By ▲ 0.14 (0.66%)
FFBL 33.80 Decreased By ▼ -0.05 (-0.15%)
FFL 9.74 Increased By ▲ 0.02 (0.21%)
GGL 10.51 Increased By ▲ 0.06 (0.57%)
HBL 114.50 Increased By ▲ 1.76 (1.56%)
HUBC 139.52 Increased By ▲ 2.08 (1.51%)
HUMNL 11.78 Increased By ▲ 0.36 (3.15%)
KEL 5.22 Decreased By ▼ -0.06 (-1.14%)
KOSM 4.67 Increased By ▲ 0.04 (0.86%)
MLCF 37.99 Increased By ▲ 0.19 (0.5%)
OGDC 139.26 Decreased By ▼ -0.24 (-0.17%)
PAEL 26.10 Increased By ▲ 0.49 (1.91%)
PIAA 22.20 Increased By ▲ 1.52 (7.35%)
PIBTL 6.85 Increased By ▲ 0.05 (0.74%)
PPL 123.67 Increased By ▲ 1.47 (1.2%)
PRL 26.96 Increased By ▲ 0.38 (1.43%)
PTC 14.00 Decreased By ▼ -0.05 (-0.36%)
SEARL 59.50 Increased By ▲ 0.52 (0.88%)
SNGP 68.72 Decreased By ▼ -0.23 (-0.33%)
SSGC 10.47 Increased By ▲ 0.17 (1.65%)
TELE 8.42 Increased By ▲ 0.04 (0.48%)
TPLP 11.25 Increased By ▲ 0.19 (1.72%)
TRG 64.18 Decreased By ▼ -0.01 (-0.02%)
UNITY 26.58 Increased By ▲ 0.03 (0.11%)
WTL 1.46 Increased By ▲ 0.01 (0.69%)
BR100 7,949 Increased By 111.6 (1.42%)
BR30 25,724 Increased By 272.4 (1.07%)
KSE100 76,057 Increased By 942.6 (1.25%)
KSE30 24,454 Increased By 340.3 (1.41%)

LONDON: HSBC on Friday comfortably defeated an activist proposal supported by its largest stakeholder, the Chinese insurer Ping An, that sought to split the bank in a search for better returns.

Shareholders voted overwhelmingly to reject the move, in line with the Asia-focused lender’s recommendation, the group said at its annual general meeting in Birmingham, central England.

The vote came at the end of a week in which the London-headquartered bank posted a surge in quarterly net profit, boosted by rising interest rates and its rescue of the UK arm of failed US lender Silicon Valley Bank.

“A large majority of HSBC shareholders voted overwhelmingly to support the board,” HSBC chairman Mark Tucker told the AGM. “That draws a line (under) the debate over the structure of the bank.”

Speaking earlier at the meeting, which faced disruption by climate protesters, Tucker insisted that the proposal to split the bank would not be beneficial.

HSBC faces shareholder vote on splitting bank

“We concluded that the alternative structural options would materially destroy value for shareholders, including putting your dividends at risk. This remains our unanimous view today,” he said.

But Ping An, which owns more than eight percent of HSBC, argued that the lender lags behind international peers and that a recent improvement in performance was tied mainly to rising interest rates, which it claims have peaked.

The US Federal Reserve this week hinted that it would pause a policy of lifting borrowing costs aimed at cooling inflation.

The European Central Bank on Thursday delivered a smaller interest rate increase than recently as higher borrowing costs begin to take their toll, but said it had “more ground to cover” in fighting red-hot price increases.

“It is necessary for HSBC to push for structural reform to fundamentally address HSBC’s underlying market competitiveness issues,” Michael Huang, chairman and CEO of Ping An Asset Management, said recently.

Hong Kong HQ?

Ping An also wants HSBC to engage in a “strategic restructuring” that would see it create a separately listed bank headquartered in Hong Kong.

Huang said the proposal would allow the bank to retain control over a separate Asia business, adding that management had “exaggerated many of the costs and risks” associated with a split.

HSBC profit triples on higher rates, beats expectations

HSBC was among a number of major banks to cancel dividends early in the Covid-19 pandemic after a de facto order from the Bank of England, a move that riled some Hong Kong investors.

Some retail investors have cited the dividends cancellation as a reason to back the spin-off proposal.

Friday’s shareholder meeting faced disruption from climate protesters, a common feature this year at annual general meetings being held by major UK companies.

“You are happy to profit while the world burns. HSBC stop the greenwash,” one protester shouted as the meeting got underway and before security removed some demonstrators.

Environmentalists are pushing for banks to stop funding fossil fuel projects, arguing that while they continue to do, their pledges to help tackle climate change are acts of “greenwashing”.

Comments

Comments are closed.