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Chinese in fresh call for HSBC break-up

Chinese in fresh call for HSBC break-up: Beijing-backed insurer Ping An goes public for the first time

HSBC’S Chinese agitator has publicly called for the bank to split up – just weeks after boss Noel Quinn said the matter was ‘closed’. 

Ping An, the Beijing-backed insurer, is also pushing for HSBC to pursue ‘much more aggressive’ cost cuts. 

It is the latest salvo in a battle between the bank and its largest shareholder which has been running for most of this year. 

Pushed back: HSBC chairman Mark Tucker has been against a spin-off

Ping An revealed privately to HSBC in February that it wanted the bank to spin off its Asia business from its operations in the West, claiming that they were holding back the banking giant’s performance. HSBC hit back, arguing that the group’s strengths were in being a global business which could unite East and West. 

Just last month, when asked about the break-up proposals, Quinn, HSBC’s chief executive, said discussions on the subject were ‘closed’. 

But in an interview with the Financial Times, Ping An Asset Management’s chairman Michael Huang said: ‘We will support any initiatives including a spin-off that are conducive to improve HSBC’s performance and value.’ 

Sources close to the Chinese company said it was still pushing to split HSBC and discussions were ‘ongoing’. 

Ping An – founded in 1988 and based in Shenzhen – has justified its break-up calls by pointing to years of lacklustre share price growth at the lender, and the cancellation of its dividend during the Covid-19 pandemic – a policy which was enforced by the Bank of England. But Quinn and Mark Tucker, HSBC’s chairman, have urged investors to stick with their plan, which has seen the bank shed non-essential parts of its business in countries such as France and Brazil. 

They are also looking to shave down costs, including through a programme of 35,000 job cuts. 

A HSBC spokesman said last night: ‘We remain on track to hit all of our financial targets, including a return on tangible equity of at least 12 per cent, from 2023 onwards.’ 

Nevertheless, Huang said it was ‘urgent’ for HSBC to go further. 

The lender needed to ‘be much more aggressive in radically reducing its costs’, he added, claiming that cuts could be made in ‘manpower and IT’. 

Huang told journalists: ‘This is the most important, urgent and absolutely needed action for HSBC to improve its business performance, reducing costs and increasing efficiency, particularly amid slowing growth in the global financial industry.’ 

While critics claim the push for change at the bank is driven by officials in the Chinese government, and their desire to get their hands on the Asian parts of the London-based lender, 

HSBC has denied this is the case. HSBC shares yesterday shot up 5.8 per cent, or 26,85p, to 490p.