HSBC poised to see off Asia spinoff threat at crunch shareholder vote

By Lawrence White

BIRMINGHAM, England (Reuters) -HSBC is expected on Friday to defeat a proposal by Hong Kong-based investors, backed by its biggest Asian shareholder Ping An, which calls for the lender to consider spinning off its Asia business.

Investors will vote on the proposals at the bank’s annual general meeting in Birmingham in central England, but Ping An and its supporters face an uphill battle to secure the 75% of votes cast needed to succeed.

Those proposed by individual investor Ken Lui and supported by Ping An call on HSBC to boost dividend payouts, and to regularly review strategy including the possibility of carving out the Asia business that generates most of the bank’s profit.

HSBC Chairman Mark Tucker the meeting that any break-up of the bank would undermine its global strategy and dent its revenue, repeating the bank’s argument that it would be risky and costly.

“So it would not be in shareholders’ interests to split the bank,” Tucker said.

Like Barclays (LON:)’ investor meeting earlier this week, HSBC’s event was repeatedly interrupted by climate campaigners singing songs, while one protester stood up at the front of the hall with a banner reading ‘No more dirty coal’.

Another protester underwent a symbolic “greenwashing” in a bathtub placed outside the conference venue.

Major banks have long been targeted by green campaigners who say lenders have not done enough to curb financing of polluting companies and industries.

Barclays’ annual meeting on Wednesday was disrupted by campaigners singing a song inspired by the Spice Girls’ ‘Stop’, calling on the bank to end funding for oil and gas.

PUBLIC SPAT

HSBC has asked investors to vote against Lui’s proposals on its dividend and broader strategy, and so far no other big institutional investors have signalled they are in favour.

On the contrary, Norway’s state investment fund, HSBC’s 4th biggest investor, has said it will back the bank’s board and advisory firms including Glass Lewis and ISS which recommend how investors wield proxy votes, have urged support for the bank.

Lui told CNBC News in an interview broadcast ahead of the meeting that he had emailed all of HSBC’s top 50 investors and eight had replied, who he had met either over video calls or in person to discuss his resolutions.

Lui said he was only able to disclose he had met with Ping An and that they were supportive. When he submitted the resolutions he was “very confident” they would pass, Lui added.

HSBC and Ping An have been engaged in an increasingly heated and public spat since last November, when the Chinese insurer first began pressing for HSBC to separate its Asian business from the rest of the bank in a bid to improve returns.

HSBC tripled its profit in the first quarter as rising interest rates boosted its income, paying its first quarterly dividend since 2019.

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