HSBC’s largest shareholder shares ‘deep concerns’, pushes for break-up

Ping An expressed five points that need to be addressed.

Chinese insurer, Ping An Asset Management Company (PAAMC), shared their sentiments regarding the costs and risks of HSBC, pushes for bank to "break-up."

Michael Huang, Chairman & CEO PAAMC said in a statement that despite HSBC’s financial performance growth last year, he remains “deeply” concerned about five fronts.

Huang said that HSBC management did not succeed in fundamentally addressing key business models and challenges.

To cap off the list of concerns, was how the Group emptied HSBC Asia of “dividends and growth capital to support its relatively low return non-Asia businesses,”

Huang emphasised the need for HSBC to restructure and address its underlying market competitiveness issues.

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Despite Ping An’s and other shareholders’ demand for HSBC to separately list the Asian business in Hong Kong in the past, this suggestion did not materialise.

“Not only did management refuse to countenance any benefits but also, in our view, exaggerated many of the costs and risks,” Huang said.

Huang further stated that HSBC Group will remain the major controlling shareholder of a separately listed bank and would still have authority over commercial arrangements, asserting that this would improve the latter’s financial returns.

Opposed to that, an HSBC spokesperson said in a statement: “It is our judgment, supported by third-party financial and legal advice, and with third-party assurance, that alternative structural options will not deliver increased value for shareholders. Rather, they would have a material negative impact on value.”