Can Ping An Rally Investors to Split up HSBC?
Posted on 04/30/2022
HSBC Holdings plc is a financial giant straddling two words, Europe and Asia. Tracing its origins in Asia, HSBC is listed in both London and Hong Kong. Diplomatic tensions between China and the U.S., extending to the U.K., the E.U., India and other countries, and political developments in Hong Kong and Taiwan, could impact HSBC by creating regulatory, reputational, and market risks. The U.S., the U.K., the E.U., Canada and other countries have imposed various sanctions and trade restrictions on Chinese persons and companies. In response to foreign sanctions and trade restrictions, China has also announced sanctions, trade restrictions, and laws that could hurt HSBC and its customers. HSBC benefitted in a world that embraced Western-style, WEF-like globalism and the new world order. Now that geopolitical tensions have heightened, HSBC, along with its western banking peers have carefully treaded the line in China and Hong Kong. State Street Global Advisors (part of State Street Corporation) lost a major ETF mandate in Hong Kong over dilly-dallying with U.S. government compliance shifts.
Chinese insurance giant Ping An Insurance (Ping An Group) is the largest shareholder in HSBC and had made calls to split the banking giant. Ping An owns an 8.23% stake, or around 1.66 billion shares, in HSBC as of February 11, 2022. HSBC makes most of its money in Asia and Ping An wants that piece. BlackRock is the second biggest shareholder in HSBC (combining most large vehicles) at 1.52596 billion shares, or 7.56% ownership, as of April 1, 2022 data. Norges Bank Investment Management, which oversees Norway Government Pension Fund Global, has 565.86 million shares or 2.8% of HSBC as of April 1, 2022. Ping An would need to woo U.S. and U.K. asset managers for the split, or have big investors plow into HSBC stock.
In 2016, HSBC decided to keep its headquarters in London. Already, HSBC’s CEO Noel Quinn has doubled down on Asia by making some global executives live in the region. HSBC also directed billions of dollars in the Asia wealth management business. In the first quarter of 2022, HSBC finalized its acquisition of AXA Singapore.
Facts
Total number of voting rights in HSBC Holdings plc is 20,124,647,248 (as of April 29, 2022).
