Shareholders of HSBC, the European financial giant, voted on Friday to reject an investor proposal aimed at putting pressure on the bank to end its lucrative operations in Asia.
That initiative, backed by HSBC’s biggest investor, sprawling Chinese insurer Ping An, received only about 20 percent of the vote, the company said. A complementary proposal backed by Ping An, to restore the bank’s dividend to pre-pandemic levels, was also rejected.
The vote was a show of support for HSBC management, which had urged shareholders to vote no. It was announced by the bank’s chairman, Mark Tucker, at the annual meeting of shareholders on Friday 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.
“Going global is how we generate a significant portion of our revenue and is central to our entire strategy,” Tucker said in a statement. “A restructuring or spin-off would mean that we lose these revenues as our bank would no longer have the connectivity that our customers value.”
With nearly $3 trillion in assets, HSBC is among the 10 largest global banks. And with one of the strongest presences in Asia of any Western lender, the company is seen as well positioned to benefit as China’s economy recovers from pandemic lockdowns. In recent years, the lender has tried to focus more on its operations in Hong Kong and mainland China, including by selling off businesses in less important markets.
But for Ping An and some other investors, the bank has not done enough to boost their business in China, instead diverting money from them to support slower-growing operations in the West. The insurer is also concerned that the company will be affected by geopolitical tensions between China and the West.
Over the past year, Ping An, a giant in its own right as the world’s largest insurance company, has privately and then publicly pushed HSBC to break up the Asian business somehow. Last month, he publicly backed shareholder initiatives that would force the company to regularly review its global structure, as well as return its dividends to pre-pandemic levels.
HSBC executives dismissed the initiatives as short-sighted and risky, and urged investors to shun them. They were backed by several proxy advisory firms, which advise investors on how to vote in corporate elections and often have influence with shareholders.