HSBC’s biggest shareholder tells bank to spin off Asian business

China’s largest insurer has told HSBC it should break itself up and separate out its Asian operations.

Shenzhen headquartered insurer Ping An has told HSBC’s board it believes the London and Hong Kong listed bank should split itself up, in order to free up the its Asian business.

The Chinese insurance giant, which owns a 9.2 per cent stake in HSBC, is currently HSBC’s largest shareholder.

The insurer has argued that separating out HSBC’s Asian business would allow it achieve greater profitability and allow local management greater autonomy.

The calls come after HSBC, which traces its origins to colonial era Hong Kong, rejected plans to move its headquarters to the city-state, in deciding it would keep retain its HQ in London – despite making most of its money in Asia.

Last year, HSBC earned 52 per cent of its total $49.6bn revenues and 65 per cent of its pre-tax profits from its Asian operations.

Ping An’s plan comes as HSBC continues to navigate mounting geopolitical tensions between China and the West. Ping An believes these tensions are weighing down HSBC’s share price, according to reports.

Critics have also claimed HSBC’s global operations add unecessary costs to the bank’s business without delivering sufficient benefits.

On the other hand, analysts have argued that HSBC benefits from having footholds in both Asia and the West.