HSBC boss denies Beijing will cut bank in half: bank fights back, reveals half-year profit of £7.5bn
- The British lender has faced a campaign by its largest shareholder
- Ping An wants it to divide its eastern and western operations
- The insurance group has been critical of years of disappointing earnings at the sprawling global lender
HSBC has vowed to keep its affairs together – denying that politicians in Beijing were behind the call to split the bank in two.
The British lender has faced a campaign in recent months by its largest shareholder, the Chinese state-backed insurer Ping An, to divide its eastern and western operations.
The insurance group has been critical of years of disappointing earnings at the sprawling global lender.
HSBC has vowed to keep its affairs together – denying politicians in Beijing were behind the call to split the bank in two
But HSBC boss Noel Quinn defended the bank when it revealed its first-half results yesterday, promising higher dividends in a bid to appease Hong Kong shareholders.
He said the bank had hired investment banks Goldman Sachs and Robey Warshaw to evaluate a breakup but concluded that splitting the company would involve “material costs” and a “high risk of bankruptcy.” bring’. ‘
There would be significant risk over a three to five year period if customers, employees and shareholders were all distracted,” he said.
Quinn said about the split proposal. ‘Alternative options will not add value for shareholders.
“On the contrary, they would negatively impact value, and our current strategy is the fastest and safest way to achieve the higher returns and dividends we all want to see.”
In an effort to stave off pressure from Ping An, Quinn and HSBC Chairman Mark Tucker will address a group of shareholders in Hong Kong tomorrow—the first face-to-face meeting since 2019.
Experts said any suggestion that Ping An, whose largest shareholder is the Chinese government, acted of its own volition was “laughable”. 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, state-controlled move.” Quinn denied that calls for a split were politically motivated.
‘The conversations between us and Ping An were purely about commercial matters. We don’t see this as a matter of politics,” he said. “We think the discussions between us and Ping An were purely commercial issues. We don’t see this as a matter of politics.’
HSBC has also denied claims that the Chinese government is trying to influence its work. The lender reported profits of £7.5bn for the first half of the year, down from £8.9bn last year but above analyst expectations.
It set aside £897 million to cover loans that are expected to deteriorate as the economic environment deteriorates. Shares rose 6.1 pence, or 31.5 pence, to 545.2 pence yesterday.
Separately, HSBC is required to give around 17,000 lower-paid workers, who make up nearly half of the UK-based company, a one-time bonus of £1,500. All five of the UK’s largest retail banks have pledged to pay staff more money as household incomes come under pressure from inflation.