HSBC has hit back at accusations from its biggest investor that it exaggerated the cost of spinning off its Asian operations, saying such a break-up would result in a “material loss of value” for its shareholders, reports the Financial Times. HSBC and insurer Ping An, which owns 8% of the bank’s stock, have exchanged blows in the run-up to the UK-listed lender’s annual general meeting in two weeks.
Ping An has called for the bank to be split up, though has so far failed to attract support from other large shareholders or proxy advisers. “Structural reforms of HSBC’s Asia-Pacific businesses suggested by Ping An would significantly dilute the international business model upon which HSBC’s strategy is based,” the bank said in a statement on Wednesday afternoon.
“This would result in a material erosion of earnings, returns, dividends and shareholder value, and a disruption to our unique global customer service proposition,” it added. “Accordingly, HSBC cannot support or recommend to its shareholders the structural options that have been proposed or otherwise considered.”