Chinese insurance firm Ping An has confirmed plans to use HSBC Holdings PLC (LSE:HSBA)’s May 5 AGM to demand the British banking multinational boost dividends and consider structural reforms.
Ping An, which has an 8% stake in the London-listed bank, has long called for a hive-off of its Asian business alongside significant cost-cutting measures, but has so far been unclear on its dividend stance.
Now, according to a Financial Times report, Ping An intends to support a raft of resolutions put forward by retail investors calling for better yields on their shareholdings.
Ping An itself generates around US$1bn a year from HSBC dividends, the FT reported.
HSBC previously caught the ire of investors by scrapping dividends during the pandemic (in line with all other lenders), leading to claims against the lender to reissue revoked dividends.
The proposals backed by Ping An call on HSBC to “implement a long-term and stable dividend policy that . . . should distribute dividends to its members at the pre-Covid-19 pandemic level”, of no less than 51 cents per share a year”.
Other proposals due to be voted on are aimed at “increasing its value by structural reform (by) spinning off, strategic reorganisation and restructuring its Asia businesses”.
HSBC has urged shareholderfs to reject the break-up calls, with chair Mark Tucker previously saying that a restructuring or spin-off of its Asia business “would create a major period of uncertainty for clients, and employees and shareholders would be disrupted”.
HSBC intends to pay a 21-cent special dividend, worth US$4bn, in 2924 from proceeds of the sale of its Canadian business.