Around a thousand shareholders gathered at the informal meeting in Hong Kong yesterday to hear HSBC deliver its group strategy update and respond to investor queries about its decision to reject Ping An’s breakup proposal.

HSBC group chairman Mark Tucker, chief executive officer Noel Quinn and chief financial officer Ewen Stevenson underwent seven-day quarantines to join Asia Pacific chairman Peter Wong Tung-shun in Hong Kong to meet shareholders in an informal meeting yesterday. Around 1,000 shareholders reportedly attended the first face-to-face meeting with HSBC’s senior management in three years. 

The meeting occurred one day after the bank delivered its first half results of $9.2 billion in net profit, which beat analyst estimates, and its rejection of Ping An’s breakup proposal, citing risks to credit rating, taxes and operating costs in the long-term alongside a one-off execution cost.

Pre-Meeting Hype

In the run-up to the meeting, there was growing noise about support for Ping An’s breakup proposal from retail shareholders. This includes activist investor Ken Lui who said a breakup would help reduce geopolitical risks between China and the west, as well as local politician Christine Fong who called for the inclusion of Ping An on HSBC’s board. 

And just moments before the meeting commenced, around 30 HSBC retail investors reportedly staged a brief protest outside the conference room entrance, demanding that the bank’s management step down over dividend cancellations and weak returns.

Dividend Apology

HSBC kicked off the meeting with an apology from Tucker and Quinn over the decision to cancel dividend payments two years ago due to a Bank of England order to maintain balance sheet health – a sore point for many Hong Kong investors, some of which depend on dividends to pay for daily expenses.

«I am deeply sorry for the cancellation,» Quinn said. «I totally understand that many of you rely on that income and that you were disappointed and distressed [for] not receiving it. I know many of you still feel strongly about that topic. I want you to know that we wanted to pay dividends, but we were unable to do so.» 

The bank reiterated its plans to resume quarterly dividends in 2023 with an increased payout ratio to 50 percent which led to a round of applause from the audience. 

Anti-Breakup Shareholders

Not all present at the meeting supported Ping An’s breakup call with one unidentified shareholder saying that an Asian spin-off would result in HSBC becoming «no different from other mainland [Chinese] banks in the city», according to an «SCMP» report, which also drew a round of applause.

«If the management can enhance the bank’s performance, there is no need to split,» he said at the meeting.

«The biggest institutions and the greatest shareholders of HSBC tell us they are supportive of our strategy,» Tucker added. «They are supportive of the management and they feel the best way we can get value to our shareholders is to continue doing the things we’re doing.»

Three Initiatives

As part of its efforts to demonstrate continued commitment to the Hong Kong market, HSBC announced three initiatives at the meeting to support the city. 

It said it would launch a HK$40 billion ($5.1 billion) fund to help small and medium enterprises grow, hire and digitize; abolish basic banking fees and charges with the aim of helping customers save over $25 million per year; and simplify its mobile app to improve user-friendliness for elderly customers.