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HSBC recently faced shareholder scrutiny at an informal meeting, where Chairman Mark Tucker and CEO Noel Quinn defended their strategy amidst calls for a breakup. Tucker reiterated that the board opposed a resolution to split the Asian business as it would not be beneficial to shareholders. He emphasized that the current strategy is yielding positive results, with increasing dividends.
HSBC has been under pressure to separate its Asian business due to concerns about performance. However, Quinn reassured shareholders that profits in Hong Kong and the UK are no longer dragged down by underperformance in other regions. He also highlighted the potential revenue loss from a bank breakup, mainly due to cross-border transactions.
Amidst shareholder dissatisfaction over the previous dividend cancellation, HSBC has seen calls for a spinoff of its Asian business. Small shareholders who relied on dividends for their expenses have been particularly affected. Despite reintroducing dividends in 2021, some shareholders are in favor of the spinoff due to its potential impact.
The upcoming general meeting will vote on the resolution to separate the Asian business, requiring 75% of votes for approval. Shareholders, like activist Ken Lui, are pushing for support. Additionally, HSBC’s largest shareholder, Ping An, has backed initiatives to improve performance and value through a potential reorganization.
HSBC’s acquisition of SVB’s UK arm has also come under scrutiny. Critics questioned the due diligence done before the acquisition. However, Tucker and Quinn defended the move and called it a good business opportunity to gain innovative startups as customers.
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