Thursday 01 December 2022 4:40 pm

HSBC has ‘moved on’ from exploring Asian business sell off, chief Quinn says

Private equity firms were involved in 60 per cent of deals of Europe’s insurance sector M&A deals in 2022, accounting for 263 of the 435 deals

The HSBC board has “moved on” from exploring selling its Asian business in a move that would have kowtowed to its largest shareholder, the bank’s chief executive said today.

Speaking at the Financial Times’s banking summit, Noel Quinn doubled down on his conviction that HSBC should continue to operate as a global bank.

Investors “want an international bank,” Quinn, 61, who worked his way up HSBC’s hierarchy after joining MIdland Bank, which the high street lender acquired in 1992, to take the top stop, said.

Ping An, a Chinese insurer and HSBC’s largest shareholder, has for over a year been lobbying the lender to carve out its Asian business to stop it from continuously being dragged down by underperforming arms elsewhere.

Pretty much all of HSBC’s profits are generated by its Hong Kong and Chinese activities. Its UK arm actually is loss making, according to the bank’s latest set of results.

Quinn said the board had given splitting up the bank “serious consideration” but concluded there was “not an economic case” for signing off a demerger.

During the Covid-19 crisis, UK regulators ordered banks to stop distributing dividends to ensure they retained enough capital to cope with a surge in defaults.

That ban stemmed a flow of cash to Asian retail investors which they typically relied on for their pensions, sparking calls from the East for HSBC to extract the Asian firm from the group.

Ping An Asset Management’s chairman Huang Yong last month urged HSBC to drastically cut costs and supported any “spin-off that [is] conducive to improve HSBC’s performance and value” in a first public statement since the break up campaign started.

Some onlookers have speculated Chinese lawmakers have secretly been orchestrating the break up drive.

However, Quinn refused to be drawn into those allegations today, saying he does “not believe it’s politically motivated”.

UK politicians have slammed HSBC for not condemning China’s brutal crackdown on pro democracy demonstrators in Hong Kong and curbing human rights in the former British colony.

Quinn said he believes in the one country two systems approach.

HSBC FTSE 100 listed shares dropped more than two per cent today. Its shares are up more than five per cent so far this year, but down nearly a third over the last five years.