Hong Kong investors demand HSBC splits off Asia business

HSBC is under renewed pressure to spin off its Asia business after a group of Hong Kong-based small investors took out a newspaper advert agitating for change.

Ken Lui, a shareholder who leads the group, is pushing for a resolution to be put at the bank’s annual general meeting in April calling on it to restore its pre-pandemic dividend and plan for the split.

The advert said HSBC ‘underperforms its peers, violates dividend commitments [and] ignores shareholders’ interests’.

Split decision: HSBC’s Hong Kong headquarters. A group of small investors are demanding the bank spin off it’s Asia business

A push for UK-based HSBC to spin off the Asia business, where it makes most of its money, began this year. 

Prominent shareholder Ping An, a Chinese insurer, last month called for a break-up and job cuts to reduce costs.

Lui, founder of the Hong Kong Investor and Entrepreneur Institute, said he had contacted 500 shareholders as part of his campaign. 

He did not contact Ping An but said he would welcome him joining the campaign.

Lui said that under UK company law, 100 minority shareholders could club together to propose a resolution. 

HSBC’s large retail investor base in Hong Kong was upset when the Bank of England banned lenders from paying dividends during the pandemic.

It has now resumed payouts but they come less often and are overall smaller than before.

HSBC has resisted calls for a spin-off. 

It said: ‘The conversations we’ve had with other institutional investors are that they also do not believe there is an economic case for splitting.’ 

Its shares fell 1 per cent, or 5.05p, to 492.65p yesterday.