Four-fifths of HSBC`s shareholders (investors) voted against the proposal to break up the bank. As a result, the separation of the financial activities of this large UK-based bank in Asia and the West has been rejected.
The vote took place at the annual general meeting (AGM) at the bank`s headquarters in Woodcock Street, Birmingham, on Friday (5 May) evening. This information is known from the AGM minutes uploaded on the bank`s website.
Mark Tucker, HSBC Group Chairman, said, “I’m delighted that the large majority of HSBC’s shareholders have voted overwhelmingly to support the bank’s strategy and draw a line under the debate on the structure of the bank. The Board, HSBC colleagues and our shareholders can now move forward with the shared objective of focusing on our customers, driving stronger performance, and creating more value for our investors.”
The Chinese company Ping An Insurance played a major role in proposing the division of HSBC Asia and West part. Ping An alone owns 8% of HSBC shares.
They defended their claim that the bank`s largest profits came from the Asian region. Hence, the separation of the financial operations of the bank would be beneficial to the shareholders in Asia.
Hong Kong-based investors supported Ping An`s proposal. It is in this context that an individual investor named Louis Yu Qin put the proposal to the AGM on Friday and the vote was held.
HSBC chairman Mark Tucker and chief executive Noel Quinn already knew such a proposal was coming to the AGM. That is why both of them have been lobbying against this proposal to give their opinion in the larger interest of the shareholders.
Note that the bank did not pay any dividend to investors in 2020, the year of Covid-19 spread. Many investors were also unhappy with the subsequent dividend payout.
Meanwhile, the influential US newspaper `The Diplomat` said in its report that HSBC Bank`s proposal to separate its financial operations reveals that Chinese officials and policymakers have privately suggested taking pre-emptive measures to protect against possible US sanctions on assets outside China.
The Diplomat`s report also said that one-third of the bank`s asset value is spread under customers in Hong Kong, one-half in the UK and the rest among customers around the world, including China.
