HSBC today has hit back at intense pressure from its biggest shareholder to spin out its Asia business.
The chief of Britain’s largest lender, Noel Quinn, said HSBC’s “strength as a well connected, global institution is the main reason our wholesale clients choose”.
“We are determined to capitalise on the advantages our network gives us,” he added.
The remarks are a veiled rebuff to Chinese insurer Ping An’s calls to carve out its Asian arm, which generates a huge proportion of the bank’s profits.
HSBC said a de-merger would cost the bank huge sums of money as a result of paying off executives and restructuring to comply with regulations.
Ping An’s proposal has been backed by Asian shareholders who are tiring of HSBC’s UK and European businesses dragging down its booming Asia arm.
A better than expected profit take steered the lender to announce a new dividend of nine cents per ordinary share for the second half of this year.
Profits hit $9.2bn (£7.5bn) in the first six months of the year, down slightly from the same period in 2021 but well above analysts’ expectations.
A $1.1bn (£902m) build up of reserves to cope with an expected uptick in defaults caused by household budgets being squeezed by inflation surging to historic highs weighed on HSBC’s profits.
The rosy results boosted HSBC’s share price 5.8 per cent, sending it to near the summit of the FTSE 100.
Its net interest margin – the difference between what a bank charges borrowers and pays to depositors – extended around 10 basis points, widened by the Bank of England’s five successive rate hikes.
HSBC’s common equity tier one ratio, a measure of the strength of a bank’s balance sheet, fell 2.2 percentage points, caused by a sharp fall in bond prices as investors pencil in more rate hikes from central banks.
The post HSBC hits back at Ping An calls to carve out Asia business appeared first on CityAM.
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