HSBC Holdings PLC (LSE:HSBA) executives have defended their strategy to operate as a global bank after rebuffing a break-up plan by its top investor, at its first meeting in Hong Kong in three years.
However, Mark Tucker, chairman of the FTSE 100-listed group, reportedly told 1,000 retail investors gathered at Hong Kong's Kowloon international trade centre that the board was examining "alternative structures", without giving details.
China's Ping An Group, an insurance firm, is pressuring the lender to explore options that could increase shareholder returns, including spinning off its mainstay Asia business.
The investor meeting was attended by hundreds of shareholders who grilled Tucker and chief executive Noel Quinn about dividends and growth.
In a statement, a spokesman for Ping An said, "We note the demands expressed by a number of HSBC’s small and medium-sized shareholders. We support any proposal that is conducive to improving HSBC’s operating performance and enhances shareholder value."
This week the banking giant increased dividend payments as a way of winning over shareholders, as it reported a 62% jump in profits in the second quarter.
It announced a new interim dividend of US$0.09, with Quinn promising to restore dividends to pre-Covid levels as soon as possible, saying, "We continue to believe that our current strategy and structure will deliver very good returns over the next few years."
HSBC's last full dividend before the pandemic was US$0.51, but it cancelled payouts during the pandemic, following the guidance of the Bank of England.
This angered Asia-based shareholders, with an activist group called 'Spin Off HSBC Asia Concern Group' leading an effort to reinstate HSBC's dividend in 2020.
Hong Kong shareholders make up a third of HSBC's investors, and have been urged to support HSBC's new business plan that refocuses its investments in Asia.HSBC has rejected demands for Ping An to be given a board seat, with Quinn saying it would be a "conflict of interest". Ping An's proposal has not been endorsed by any other major shareholders.