Shareholders of European financial giant HSBC voted Friday to reject an investor proposal meant to pressure the bank to divest its profitable Asian operations.
The initiative, backed by HSBC’s biggest investor, the sprawling Chinese insurer Ping An, received only about 20% of the vote, the company said. A companion proposal in favor of Ping An to return the bank’s dividend to pre-pandemic levels was also rejected.
The vote was a sign of support for HSBC’s management, who had asked shareholders to vote against it. The announcement was made by the bank’s chairman, Mark Tucker, at its annual shareholder meeting held on Friday in Birmingham, England.
The bank’s management has repeatedly rejected calls to separate its Hong Kong-based business, which accounts for nearly half of its revenue.
“Being global is how we generate most of our revenue and is central to our overall strategy,” Tucker said in a statement. It means losing.”
With nearly $3 trillion in assets, HSBC is one of the 10 largest banks in the world. It also has the strongest presence in Asia among Western financial institutions and is believed to be well positioned to profit as the Chinese economy recovers from pandemic lockdowns. In recent years, Lender has sought to focus more on its operations in Hong Kong and mainland China, including divesting operations in less important markets.
But for Ping An and some other investors, the banks haven’t done enough to bolster their China business, instead siphoning money from them to bolster their slow-growing business in the West. The company also worries that geopolitical tensions between China and the West will hurt the company.
Over the past year, Ping An, a giant in its own right as the world’s largest insurer, has in some way privately and publicly pressured HSBC to terminate its Asian operations. Last month, the company regularly reviewed its global structure and publicly supported a shareholder initiative to force dividends to return to pre-pandemic levels.
HSBC management dismissed the initiative as short-sighted and risky, and urged investors to reject it. They advised investors on how to vote in corporate elections and were often supported by several voting advisory firms that were influential among shareholders.
