HSBC, Prepares to Meet Hong Kong Investors

Bosses of HSBC will meet retail investors on Tuesday in Hong Kong, the biggest market for Europe's biggest lender, to try to convince shareholders that their strategy to operate as a global bank is vital to boost growth.

The London-headquartered group is under pressure from its largest shareholder, Ping An Insurance Group Co of China Ltd, to explore options, including splitting its core business in Asia, to boost shareholder returns. The informal meeting to discuss earnings and strategy came a day after HSBC rejected calls for a split, posted profit that beat forecasts and promised higher dividends, sending its Hong Kong-traded shares to their highest in a month. Ping An, who has held a stake in HSBC since 2017 when the bank's share price was about a third higher, has made it clear he supports any reform proposals that could help boost the long-term value of HSBC Holdings (NYSE:HSBC) PLC. The insurer owned 8.23% of HSBC as of early February. Local investors are also calling for a change in strategy. "Retail shareholders would welcome any proposal that would change the status quo or improve investor confidence in management," said shareholder Ken Lui, founder of an HSBC shareholder group. "But why am I raising my voice and supporting the spin-off proposal? Because I have no confidence in management," he said. During the COVID-19 pandemic in 2020, the shareholder group urged HSBC to bring back its dividend payment after the Bank of England canceled it following a request to lenders. HSBC's statements on Monday represent its most direct defense since news of Ping An's proposals emerged in April. Chinese state-owned Shenzhen Investment Holdings Co is the insurer's second-largest shareholder and another state-owned entity, Central Huijin Investment, is among its top five shareholders, according to company filings. A Hong Kong politician has also called on HSBC to appoint Ping An's representatives to its board. HSBC decided in 2016 to keep its headquarters in London and, after a 10-month review, rejected the option of moving its headquarters back to Hong Kong, its profit-making home base.