HSBC, Asia policy.

Ping An, HSBC’s largest shareholder, publicly called on the bank to spin off its Asia business and urged it to be «much more aggressive» on costs by cutting jobs. «We will support any initiatives, including a spin-off, that is conducive to improving HSBC’s performance and value,» Michael Huang, chair of Ping An Asset Management, said. Huang said it was «urgent» that HSBC went further on cost-cutting to bring down its expenses, which it said were far higher than its rivals. Huang’s comments mark the first time the insurance company has spoken publicly about HSBC since it emerged this year that it had privately urged the bank to hive off its Asian operations to boost returns.

HSBC, led by chair Mark Tucker, has pushed back against separating its Asian business, claiming it would be too complicated and incur huge costs. Ping An started agitating for a breakup in February, complaining of years of under performance by the lender and the cancellation of HSBC’s dividend during the pandemic. Ping An’s request for further cost-cutting and a greater allocation of resources to Asia are among the measures the insurer believes will improve HSBC’s returns. However, it has stopped short of publicly calling for a breakup. Huang said HSBC delivered returns of 8.3 per cent last year, «far below» the 12.3 per cent average of peers.

Huang said HSBC should «be much more aggressive in radically reducing its costs». «This is the most important, urgent and needed action for HSBC to improve its business performance, reducing costs and increasing efficiency, particularly amid slowing growth in the global financial industry,» Huang said. HSBC is aiming to remove $5.5bn of costs by the end of this year and another $1bn next year. He said HSBC should make «concrete measures» to «strengthen its market position in Asia and capture the opportunities arising from the rapid development in the Asian market while striking a balance between its global finance model and cross-border systemic and geopolitical risks».

HSBC said it was on track to hit all its targets from 2023 onwards, including a return on tangible equity of at least 12 per cent.

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