HSBC shareholders defeat measure aimed at divestment of activities in Asia

Shareholders of HSBC, the European financial giant, voted on Friday to reject an investor proposal designed to pressure the bank to break down its lucrative Asian business.

That initiative — backed by HSBC’s largest investor, sprawling Chinese insurer Ping An — received only about 20 percent of the vote, the company said. An accompanying proposal, backed by Ping An, to reduce the bank’s dividend to prepandemic levels was also rejected.

The vote was a show of support for HSBC’s management, which had urged shareholders to vote no. This was announced by the bank’s chairman, Mark Tucker, on Friday at the annual shareholders’ meeting in Birmingham, England.

The bank’s leaders have repeatedly rejected calls to spin off its Hong Kong-based business, which accounts for nearly half of its revenue.

“Being global is how we generate a significant portion of our revenue and is central to our entire strategy,” Mr Tucker said in a statement. “A restructuring or spin-off would mean we lose this revenue because our bank would no longer have the connectivity that our customers value.”

With nearly $3 trillion in assets, HSBC ranks among the 10 largest global banks. And with one of the strongest presences in Asia of any Western lender, the company is believed to be well positioned to benefit from the Chinese economy’s recovery from pandemic lockdowns. The lender has tried in recent years to focus more on its activities in Hong Kong and mainland China, including moving into selling businesses in less important markets.

But according to Ping An and some other investors, the bank hasn’t done enough to bolster its China-focused businesses, instead siphoning money from them to support slower-growing operations in the West. The insurer is also concerned that the company is hurt by geopolitical tensions between China and the West.

Over the past year, Ping An, a behemoth in its own right as the world’s largest insurance company, has been pressuring HSBC both privately and publicly to somehow break down its Asian business. Last month, it publicly supported shareholder initiatives that would force the company to regularly review its global structure and reduce its dividend to prepandemic levels.

HSBC executives dismissed the initiatives as shortsighted and risky and urged investors to reject them. They were backed by several proxy consultancies, which advise investors on how to vote in corporate elections and often influence shareholders.