HSBC chief denies Beijing will ensure bank is split in two: Bank fights back as it reveals £7.5bn half-year profit
- The British lender faced a campaign from its largest shareholder
- Ping An wants it to split its eastern and western operations
- The insurance giant has slammed the sprawling global lender’s years of disappointing earnings
HSBC has vowed to keep its business together – and denied politicians in Beijing were behind calls to split the bank in two.
The British lender has faced a campaign by its largest shareholder, state-backed Chinese insurer Ping An, in recent months to split its eastern and western operations.
The insurance giant has slammed the sprawling global lender’s years of disappointing earnings.
HSBC has vowed to keep its business together – and denied politicians in Beijing were behind calls to split the bank in two
But HSBC boss Noel Quinn defended the bank when it presented its first-half results yesterday and promised higher dividends to placate Hong Kong shareholders.
He said the bank had hired investment banks Goldman Sachs and Robey Warshaw to explore a split, but they had concluded splitting up the business would come with “material costs” and a “high risk of default”. ‘
There would be significant risk over a three to five year period if customers, employees and shareholders were all distracted.’
Quinn said about the breakup proposal. ‘Alternative options will not add value for shareholders.
‘Rather, they would negatively impact value, and our current strategy is the quickest and surest way to get to the higher returns and dividends we all desire.’
To stave off pressure from Ping An, Quinn will join HSBC Chairman Mark Tucker to address a group of shareholders in Hong Kong tomorrow – the first face-to-face meeting of its kind since 2019.
Experts said any suggestion that Ping An, whose largest shareholder is the Chinese government, acted of its own volition is “ridiculous”. Michael Sheridan, an expert on the communist state and author of The Gate To China, told The Mail on Sunday:
“This is a high-level, government-controlled move.” Quinn denied that calls for a split were politically motivated.
“The conversations between us and Ping An were all about commercial issues. We don’t see this as a question of politics,” he said. “We believe that the discussions between us and Ping An were all about commercial issues. We don’t see that as politics.’
HSBC has also denied claims that the Chinese government is trying to influence its work. The lender reported £7.5 billion of profit for the first half, up from £8.9 billion a year earlier but beating analysts’ expectations.
£897m has been made available to cover loans that are expected to deteriorate as the economic environment deteriorates. Shares rose 6.1 percent or 31.5 pence yesterday to 545.2 pence.
Separately, HSBC is said to be giving a one-time bonus of £1,500 to around 17,000 lower-paid employees, who make up almost half of the UK-based company. All five of the UK’s largest retail banks have pledged to pay their staff more money as inflation erodes household incomes.
HSBC boss denies Beijing will ensure bank is split in two
Source link HSBC boss denies Beijing will ensure bank is split in two