China-based insurance company Ping An, HSBC’s largest shareholder, is calling for the bank to break itself into smaller operating units, according to the Financial Times, citing people familiar with the matter. Ping An says a separate business focused on Asia and listed in Hong Kong would enjoy greater profitability with lower capital requirements, while the breakup exercise would give shareholders the ability to select which parts of the huge global business they would like to own, the story said.
Ping An has submitted a breakup plan to the bank’s board, but it received a cool reception and chairman Mark Tucker rejected the idea during the most recent annual meeting, the FT said. The HSBC board may face increasing pressure to stop the bank’s steady share price slide in recent years as it seeks to balance geopolitical tension between China, the source of most of its profit, and the west, according to the FT.
Read the full report: Financial Times