London, United Kingdom – Banking giant HSBC on Wednesday reached out to shareholders, urging them to vote down a proposal by its largest stakeholder, Chinese insurer Ping An, to split the business.
It comes after Ping An on Tuesday ramped up pressure over its break-up strategy that it claims is necessary to improve performance at London-based HSBC.
Responding, the Asia-focused lender wrote in a letter to shareholders that “the board strongly believes that HSBC should focus on executing the current strategy that is delivering”.
HSBC argued this was “the best and safest way to continue to deliver substantially more value for shareholders over the coming years”.
It called on shareholders to vote against the proposal at the bank’s annual general meeting on May 5.
In a rare public statement Tuesday, Ping An had said HSBC was lagging behind international peers and a recent improvement in performance was tied to rising interest rates, which have now peaked.
Ping An outlined revised proposals for restructuring that highlight HSBC’s precarious position as US-China tensions rise, with some observers doubting whether Europe’s largest lender can continue to straddle East and West.
