LONDON, May 5 (Reuters Breakingviews) - Ping An Insurance (601318.SS) is having an underwhelming week. The $140 billion Chinese insurer’s ongoing campaign for HSBC (HSBA.L) to spin off its Asian arm would ideally have seen the $150 billion global bank, in which it owns an 8% stake, report rubbish results and then lose a shareholder resolution on breakups at Friday’s annual general meeting. Instead, HSBC’s results were decent and the AGM resolution was crushed.
True, 20% of votes cast went in favour of plans for a strategic review each quarter which could assess whether to spin off HSBC’s key Asian arm, and to reinstate the bank’s pre-Covid dividend. But with only 50% turnout, that means essentially only Ping An thought these good ideas. None of HSBC’s other top 50 shareholders played ball.
Ping An could continue to chunter away at HSBC boss Noel Quinn from the sidelines. But one key gripe – his inability to hit a 10% return on tangible equity – has lost impetus from the 19% adjusted ROTE in the first three months of 2023. Throw in the lack of investor support implied by the vote, and Ping An’s essential choice – to pipe down or to sell its stake – has become ever more stark. (By George Hay)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
