In response to Ping An’s breakup call, HSBC has issued a statement of rebuttal to reiterate its position that global connectivity will better serve the bank’s shareholders. 

On April 18, Ping An Asset Management issued a statement by chairman and chief executive Michael Huang detailing its support for a spin-off of HSBC's Asia business which it said would improve shareholder value. The Chinese firm also noted that it was «extremely disappointed by HSBC management’s consistent closed-minded attitude to all solutions».

In response, HSBC reiterated its own position in a separate statement on the matter, insisting that the bank’s global connectivity was a key differentiator and driver of profitability. 

«In various conversations between Ping An and HSBC, it was noted that both parties agreed to disagree on a number of issues,» HSBC said, highlighting around 20 meetings between the two firms at the chairman, CEO as well as senior management level in 2022 and 2023.

Spin-Off Risk

According to HSBC, there are several risks that it had considered in rejecting suggestions for the spin-off. They include the loss of revenue synergies; material one-off and ongoing running costs; as well as significant complexity and execution risks.

«HSBC’s existing strategy is working and is delivering improving returns and dividends,» the bank said. «Separation is not consistent with HSBC’s business model: HSBC is not a portfolio of discrete domestic banks. It is an integrated bank.»

Resolution 17 and 18

HSBC said it recommends that shareholders vote against resolutions 17 and 18 in the upcoming annual general meeting on May 5 which calls for a strategy review and a dividend increase to pre-Covid levels, respectively. 

«HSBC is a global systemically important bank. It is not in the interests of its shareholders, customers or stakeholders for HSBC’s structure to remain the subject of prolonged debate,» the bank added.

«The board believes there is broad and consistent support from the vast majority of shareholders for HSBC’s current strategy, and for maintaining the bank’s integrated group structure.»