May 4, 2022
Turning the tables: why China’s Ping An plans to break up HSBC
"There's a certain irony in the fact that HSBC was once the biggest external shareholder in Ping An," said an adviser to the bank in Hong Kong. A break up could also create a "China-friendly bank in Asia, and a US-friendly bank everywhere else," which may reduce its risk of being vulnerable to sanctions from either side in the future, said a person close to HSBC. The reaction from HSBC's other large shareholders has been mixed. Ping An is not the first HSBC shareholder to call for a break up of the bank but is by far the most powerful by virtue of its 9.2 per cent stake and its position as a systemically important financial institution in China, one of the bank's main markets. The issue was crucial for Ping An because it owns HSBC through its life insurance arm, using the normally reliable HSBC dividend to offset its long-term insurance liabilities. "We see significant legal and political obstacles . . . the capital structure of HSBC makes a redomicile or a break up very tricky," said analyst Manus Costello.
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