BIRMINGHAM, England (Reuters) -HSBC faced down opposition to its strategy and climate policy at a fractious annual investor meeting in Birmingham in England on Friday, including a shareholder proposal to spin-off its lucrative Asia business backed by major investor Ping An.
Europe’s biggest bank is expected to defeat a proposal submitted by Hong Kong-based individual investor Ken Lui and backed by its biggest Asian shareholder Ping An, which calls for the lender to consider spinning off its Asia business.
Shareholder Lui questioned HSBC’s board directly at the meeting on Friday, prompting the bank’s chairman Mark Tucker to say criticism of the bank’s performance showed “a fundamental misunderstanding of HSBC’s business.”
Investors will vote on Lui’s proposals at the meeting, but Ping An and its supporters face an uphill battle to secure the 75% of votes cast needed to succeed.
The proposed resolutions call on HSBC to boost dividend payouts, and to regularly review strategy including the possibility of carving out the Asia business that generates most of the bank’s profit.
HSBC’s Tucker told the meeting that any break-up of the bank would undermine its global strategy and dent its revenue, repeating the bank’s argument that it would be risky and costly.
“So it would not be in shareholders’ interests to split the bank,” Tucker said.
Like Barclays (LON:BARC)’ investor meeting earlier this week, HSBC’s event was repeatedly interrupted by climate campaigners singing songs, while one protester stood up at the front of the hall with a banner reading ‘No more dirty coal’.
Another protester underwent a symbolic “greenwashing” in a bathtub placed outside the conference venue.
Major banks have long been targeted by green campaigners who say lenders have not done enough to curb financing of polluting companies and industries.
Barclays’ annual meeting on Wednesday was disrupted by campaigners singing a song inspired by the Spice Girls’ ‘Stop’, calling on the bank to end funding for oil and gas.
PUBLIC SPAT
So far no other big institutional investors have signalled they are in favour of the Asia spinoff.
On the contrary, Norway’s state investment fund, HSBC’s fourth-biggest investor, has said it will back the bank’s board and proxy advisory firms including Glass Lewis and ISS have urged support for the bank.
Lui told CNBC News in an interview broadcast ahead of the meeting that he had emailed all of HSBC’s top 50 investors and eight had replied, who he had met either over video calls or in person to discuss his resolutions.
Lui said he was only able to disclose he had met with Ping An and that they were supportive.
HSBC tripled its profit in the first quarter as rising interest rates boosted its income, paying its first quarterly dividend since 2019.
HSBC’s Tucker also told investors that the bank still planned to sell its French retail business and that negotiations for a sale were ongoing, after warning last month the deal could be in jeopardy.
Source: Economy - investing.com
