Chinese in fresh call for HSBC break-up

HSBC’s Chinese agitator has publicly called for the bank to split – just weeks after boss Noel Quinn said the case was ‘closed’.

Ping An, the Beijing-backed insurer, is also urging HSBC to pursue “much more aggressive” cost-cutting efforts.

It is the latest salvo in a battle between the bank and its largest shareholder that has been going on for most of this year.

Ping An privately announced to HSBC in February that it wanted the bank to divest its Asian operations from its Western operations, claiming they were holding back the banking giant’s performance. HSBC hit back, arguing that the group’s strengths were that it was a global company that could unite East and West.

Last month, when asked about the proposals for a breakup, Quinn, the CEO of HSBC, said discussions on the topic were “closed.”

But in an interview with the Financial Times, Michael Huang, chairman of Ping An Asset Management, said: “We will support all initiatives, including a spin-off, that help improve HSBC’s performance and value.”

Sources close to the Chinese company said it was still pushing to split HSBC and discussions were “ongoing”.

Founded in 1988 and based in Shenzhen, Ping An has justified its liquidation requests by pointing to years of moderate rise in the lender’s share prices and the cancellation of its dividend during the Covid-19 pandemic – a policy enforced by the Bank from England. But Quinn and Mark Tucker, the chairman of HSBC, have urged investors to stick with their plan, which has seen the bank divest non-essential parts of its operations in countries like France and Brazil.

They also want to cut costs, including through a program of 35,000 job cuts.

An HSBC spokesperson said last night: “We remain on track to meet all of our financial targets, including a return on tangible equity of at least 12 percent, from 2023.”

Nevertheless, Huang said it was “urgent” for HSBC to move forward.

The lender had to be “much more aggressive in radically cutting its costs,” he added, claiming it could cut “manpower and IT.”

Huang told reporters, “This is the most important, urgent and absolutely necessary action for HSBC to improve its business performance, reduce costs and increase efficiency, especially amid slowing growth in the global financial sector.”

While critics argue that the drive for change at the bank is driven by officials in the Chinese government, and their desire to get their hands on the Asian parts of the London-based lender,

HSBC denies that this is the case. HSBC shares shot up 5.8 percent or 26.85p to 490p yesterday.