HSBC said it remained committed to the deal, but closing would likely be delayed if amended terms can be reached. The deal had been expected to be completed in the second half of this year.
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HSBC’s break-up dilemma: why bank’s largest shareholder is pushing for change
HSBC’s break-up dilemma: why bank’s largest shareholder is pushing for change
As a result of the increased uncertainty, HSBC said the French retail business would no longer be classified as “held for sale” and a prior US$2 billion impairment related to the sale would be reversed.
If the transaction falls through, it would be a setback for CEO Noel Quinn’s efforts to streamline the bank’s operations and shift capital from underperforming businesses in the West to faster-growing markets in Asia.
HSBC generates the bulk of its pre-tax profit in Asia, and Hong Kong is its largest market. Since he became CEO in 2019, Quinn has moved to reshape the bank by exiting or selling less profitable or capital-intensive operations that do not fit its long-term strategy.
The uncertainty over the sale of the French business comes as HSBC continues to face pressure from Ping An Insurance Group, its biggest shareholder, to spin off its Asian operations.A group of frustrated minority shareholders also has submitted proposals for this year’s annual meeting in May, calling for the bank to increase its dividend payouts and consider radical restructuring to enhance the bank’s value, such as spinning off the Asia business.
Parts of HSBC’s Hong Kong shareholder base continue to remain frustrated over the cancellation of its final dividend for 2019 and suspension of its dividend in 2020 at the request of its chief regulator in Britain.As part of its annual results announcement in February, HSBC said it would establish a dividend payout ratio of 50 per cent for 2023 and 2024, excluding “material significant items”, and consider future share buy-backs.
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