The largest investor in Europe’s largest bank is calling for a breakup.
Ping An Insurance Group has held discussions with HSBC about spinning off its Asian business, Bloomberg reported Friday (April 29). Ping An said HSBC could create shareholder value by spinning off its operations in Asia and listing them in Hong Kong.
Ping An, the largest insurer in China, said this move would have wide-ranging support among the investors, according to the report. The company owned 8% of London-based HSBC at the end of last year.
HSBC is undergoing a worldwide $7.2 billion reorganization that’s focused on building up its Asian markets, which it views as offering it the best growth potential.
Read more: HSBC to Restart Restructuring, Eyes Deeper Job Cuts
Roughly 65% of HSBC’s profit before tax comes from Asia, versus 20% from Europe, the report stated. In 2020, when the reorganization began, HSBC’s revenue from Asia was at 50%.
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The bank has moved billions of dollars in capital toward Asia while scaling back or jettisoning unprofitable segments of its business in the U.S. and Europe.
The restructuring was announced in early 2020, with the bank saying it would cut 35,000 jobs.
Last year, HSBC sold its French retail bank to My Money Group at a loss of $2.3 billion. The deal gave My Money HSBC’s 244 branches, roughly 3,900 employees and 24 billion euros (about $25.3 billion) in assets, creating what the company called a new challenger bank in France.
See more: HSBC Loses $2.3B on French Bank Sale
Bloomberg noted that these changes are also meant to take advantage of China’s growing wealth while also expanding into other Asian markets. Much of HSBC’s senior management has already moved to Hong Kong, including Nuno Matos, CEO of wealth and personal banking, and Barry O’Byrne, who oversees global commercial banking.
