Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
According to a source with firsthand knowledge of the opinions of the largest shareholder of the Asia-focused bank, Chinese insurer Ping An Insurance Group believes that HSBC has exaggerated the challenges and difficulties of spinning off the bank.
Also Read: Benefits of Using Credit Card in India
Ping An, the bank’s largest shareholder, put pressure on HSBC in April to consider options, including listing its core Asia division, to boost shareholder returns. Asia accounts for the majority of HSBC’s revenues and profit insisting that it might actually increase the bank’s value by up to $35 billion.
It comes after HSBC’s CEO, Noel Quinn, used an earnings release last week to defend the bank’s strategy and emphasise that the continuation of its global network was essential to its success.
Proposals to divide HSBC’s lucrative Asian division
Since Ping An resurrected proposals to divide HSBC’s lucrative Asian division from the rest of the London-based bank’s operations in April, Quinn has been under pressure.
According to HSBC, a break-up would present immediate risks when carrying out any spinoff or merger and might have a long-term negative impact on the bank’s credit rating, tax bill, and operating costs.
It is unusual for a Chinese corporation like Ping An, whose top shareholders include state-backed entities, to take such a strong posture. Activist investors occasionally buy a stake in a major bank and challenge management on how it is operated.
HSBC’s market value
HSBC currently has a market value of over $133 billion. According to the source, HSBC would continue to be a significant shareholder in the division after the separation and the two parties might engage into collaboration agreements. This was in response to HSBC’s claim that spinning off its Asian company will harm global synergies.
According to Refinitiv statistics, Ping An owns an 8.3% interest in HSBC that is estimated to be worth $11.4 billion.
For the latest business and financial updates, follow and connect with us on Facebook, Twitter, and Linkedin!
To Get Finance News & Job Alerts Directly On Your Mobile Join Our WhatsApp Group