HSBC (HSBA)

[Dod101]

HSBC's top shareholder calls for banking giant's break-up - FT.

HSBC’s largest shareholder, Chinese insurance company Ping An, has called for the UK bank to break itself up, according to people familiar with the matter.

The rupture with the biggest insurer in China marks a further escalation of HSBC’s geopolitical woes, with the bank squeezed between China and the west.

Ping An has set out its plan for a break-up to HSBC’s board, led by chair Mark Tucker and chief executive Noel Quinn, according to people familiar with the matter.

The intensifying criticism will pile pressure on management, which has been struggling to reverse share price declines in recent years and navigate the increased geopolitical tension between China, where it makes most of its profits, and the west.

Ping An has argued that an independent Asia business listed in Hong Kong would have higher profitability, lower capital requirements and greater local management control and autonomy to make decisions.

A demerger would also give shareholders more choice on what parts of the sprawling lender — which has 40m customers, more than 200,000 staff and operations in 64 countries — they want to own, the insurer has said.

In the discussions with the board, it has used the break-up of fellow insurer Prudential as a model, claiming its three independent units — Jackson National, Prudential Plc and M&G — are now worth $5bn more separately than when as part of one group in 2019.

In 2015, HSBC conducted a review of whether London was the right place for its headquarters. It concluded it was and has not revisited the decision since.

Tucker has rebuffed calls for a break-up of the group, saying at the bank’s annual meeting in London on Friday that he is happy with the group’s strategy and performance.

Ping An owns 9.2 per cent of HSBC, according to two people familiar with the matter. The latest publicly disclosed shareholdings show Ping An at 8 per cent, just behind BlackRock at 8.3 per cent.

Ping An declined to comment. HSBC did not immediately provide a comment.

https://www.ft.com/content/63e7df2e-6d2 ... 8af902a83a

Ian.

As a long time shareholder in HSBC I cannot help thinking that Ping An has got a point and with the size of shareholding it has, they cannot be ignored. Watch this space.

Dod

[Steveam]

I’ve lost faith in HSBC. I feel I’ve held them forever (more than 20 years) and always felt that super tankers are solid, safe and secure. This particular super tanker has been a disappointment for many, many years. Sadly I don’t believe the current management can turn things round. Perhaps it really is too big to manage rather than too big to fail. I still have a full holding (and have topped up at various times) but now I would support a forced shake up or sale.

Best wishes,

Steve

[Dod101]

I’ve lost faith in HSBC. I feel I’ve held them forever (more than 20 years) and always felt that super tankers are solid, safe and secure. This particular super tanker has been a disappointment for many, many years. Sadly I don’t believe the current management can turn things round. Perhaps it really is too big to manage rather than too big to fail. I still have a full holding (and have topped up at various times) but now I would support a forced shake up or sale.

Best wishes,

Steve

I am sorry to say that I feel the same. I made a lot of money from them 1991/2000, then they spent some years making extremely unwise acquisitions, the next decade trying to sort them out, and now they are sort of recovering but no one in the management seems to know what they want. I think a split would probably be a good thing.

If they split they have a ready made HO in Hong Kong for their Asian ops and would resume their place there. That I expect would be welcomed by the locals and by the Chinese Government.

The UK and European ops are I would guess be big enough to stand alone.

Dod

[BullDog]

Even worse, the banks are now government footballs subject to far too much interference. I used to hold Lloyds and HSBC, but now I regard banks as firm no go areas.

[Dod101]

Even worse, the banks are now government footballs subject to far too much interference. I used to hold Lloyds and HSBC, but now I regard banks as firm no go areas.

The banks of course brought on more regulation all by themselves but funnily enough, HSBC was and is strong enough financially not to need any government help, although with their widespread ops they were of course heavily involved in money laundering for a long while.

Dod

[idpickering]

Share buy-back.

HSBC Holdings plc ('HSBC') announces that, as outlined in its announcement on 26 April 2022, it will commence a share buy-back of HSBC's ordinary shares of US$0.50 each ('Ordinary Shares') for up to a maximum consideration of US$1,000,000,000 (the 'Buy-back'). The purpose of the Buy-back is to reduce HSBC's outstanding Ordinary Shares.

HSBC has entered into irrevocable, non-discretionary buy-back agreements with Merrill Lynch International ('Merrill Lynch') to enable the purchase of Ordinary Shares by Merrill Lynch, acting as principal, during the period running from 4 May 2022 and ending no later than 31 August 2022 (subject to regulatory approval remaining in place), for an aggregate purchase price of up to US$ 1,000,000,000 and the simultaneous on-sale of such Ordinary Shares by Merrill Lynch to HSBC.

Merrill Lynch will make trading decisions in relation to the Buy-back independently of HSBC. Any purchases of Ordinary Shares will be carried out on the London Stock Exchange, Aquis Exchange, BATS, Chi X and/or Turquoise (together, the 'UK Venues ') and/or The Stock Exchange of Hong Kong Limited ('Hong Kong Stock Exchange').

The repurchases on the UK Venues will be 'on Exchange' transactions (as such term is defined in the rules of the London Stock Exchange) and will be 'on-market purchases' for the purposes of the Companies Act 2006. The repurchases on the Hong Kong Stock Exchange will be 'off-market' for the purposes of the Companies Act 2006 but will be transactions which occur 'on Exchange' for the purposes of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ('Hong Kong Listing Rules') and which constitute an 'on-market share buy-back' for the purposes of the Hong Kong Codes on Takeovers and Mergers and Share Buy-backs ('Hong Kong Buy-back Code').

The repurchases will take place in accordance with certain pre-set parameters and in accordance with (and subject to limits prescribed by) HSBC's general authority to repurchase Ordinary Shares granted by its shareholders at HSBC's annual general meeting on 29 April 2022 (the '2022 Authority'), Chapter 12 of the Financial Conduct Authority's Listing Rules, Article 5(1) of the Market Abuse Regulation (EU) No 596/2014 (as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the 'Withdrawal Act')), the Commission Delegated Regulation (EU) No 2016/1052 (as it forms part of domestic law of the United Kingdom by virtue of the Withdrawal Act)), the Hong Kong Listing Rules, the Hong Kong Buy-back Code and applicable US federal securities laws.

Ordinary Shares purchased under the Buy-back will be cancelled.

https://www.investegate.co.uk/hsbc-hold ... 00022132K/

[monabri]

For context.

$1bn or £800m.

HSBA shareprice £5.17. (approx).

Buyback 154738878 shares ( negating costs)....say 154 million.

20302 million shares (from Morningstar).

0.76% share buyback (approx).



[IF they had elected to pay a special dividend, approx 3.9p per share (£800m shared into 20302m). ]

[Dod101]

Interesting that their biggest shareholder, a Chinese insurer, Ping An, is advocating a carve up of the business, by separating the Oriental business from the rest. As HSBC argues, the whole point of HSBC is that it is a sort of bridge between east and west, and they say that much of their business in the Far East is based on links with big western companies. Indeed it was founded on trade finance; a highly profitable business, at least when I knew anything about it some years back. Of course they have a huge retail franchise in Hong Kong and that catches the eye of the outsider.

Another interesting point is that because it is regarded as one of the few truly international banks, it is required to hold considerably more reserves than if it were not, so splitting it up might allow it to release those reserves.

I can certainly see and understand the views of the HSBC management but at the same time, it has been jam tomorrow for so long with HSBC that I can see the probably short term benefits of a split. Meanwhile HSBC has appointed Goldman Sachs (so it is reported anyway) to advise it on this matter. They will need to be seen to be taking the comments from Ping An seriously as not only are they its biggest shareholder but of course they are close to the Chinese Government and HSBC has to be very aware of geopolitical matters these days.

Dod

[Dod101]

I may say I cannot find an RNS about this but it has been fairly widely reported in the newspapers so I imagine that there is something in it.

Dod

[idpickering]

HSBC Begins Internal Analysis to Help Rebut Proposal for Split.

HSBC Holdings Plc has begun an internal review that’s part of an effort to rebut calls from its largest shareholder to discuss splitting off its Asian operations.

The London-headquartered bank is examining the case for a break up after Bloomberg reported late last month that Ping An Insurance (Group) Co. was pushing the lender to spin off its Asian unit to improve returns, according to people familiar with the matter, who asked not to be identified discussing private information.

Executives are against the idea of splitting up HSBC but have begun the analysis in an effort to push back against Ping An’s argument that the bank’s investors would do better from being able to choose to invest in a pure-play Asian business headquartered in Hong Kong.

Work is in the early stages, but one of the people said the aim was to complete the report in the coming weeks and present it to the bank’s directors. Prudential Plc’s split, the insurer which carved off its Asian unit from its UK operations in 2019, is regarded as a poor comparison given the limited network effects the insurance industry can exploit. Ping An had said in a private memo that the break up of Prudential provided a precedent for splitting up HSBC.

A spokeswoman for HSBC declined to comment. A representative for Ping An didn’t immediately respond to a request for comment.

About 65% of HSBC’s of pretax profits last year came from Asia, while Hong Kong is the bank’s single largest market. However, HSBC has argued that while Asia appears to be the dominant source of its revenues, much of this is actually business with Western clients that gets booked in the region.

In an investor presentation last year, HSBC said that half of its foreign exchange revenues booked in the East came from Western clients, while about 65% of securities services revenue in the East originated in the West. Highlighting these so-called network effects will be a key part of HSBC’s case to shareholders that carving up its worldwide business does not make sense.

Analysts at Barclays Plc estimated in a research note this month the changes could knock 3% to 8% off the group’s market value. Also, any in-depth work on breaking up the bank would take more than a year, according to two people with knowledge of the company’s inner workings, highlighting how time-consuming any spin off of the Asian business could be.

https://www.bnnbloomberg.ca/hsbc-begins ... -1.1764942

[Dod101]

HSBC Begins Internal Analysis to Help Rebut Proposal for Split.

HSBC Holdings Plc has begun an internal review that’s part of an effort to rebut calls from its largest shareholder to discuss splitting off its Asian operations.

The London-headquartered bank is examining the case for a break up after Bloomberg reported late last month that Ping An Insurance (Group) Co. was pushing the lender to spin off its Asian unit to improve returns, according to people familiar with the matter, who asked not to be identified discussing private information.

Executives are against the idea of splitting up HSBC but have begun the analysis in an effort to push back against Ping An’s argument that the bank’s investors would do better from being able to choose to invest in a pure-play Asian business headquartered in Hong Kong.

Work is in the early stages, but one of the people said the aim was to complete the report in the coming weeks and present it to the bank’s directors. Prudential Plc’s split, the insurer which carved off its Asian unit from its UK operations in 2019, is regarded as a poor comparison given the limited network effects the insurance industry can exploit. Ping An had said in a private memo that the break up of Prudential provided a precedent for splitting up HSBC.

A spokeswoman for HSBC declined to comment. A representative for Ping An didn’t immediately respond to a request for comment.

About 65% of HSBC’s of pretax profits last year came from Asia, while Hong Kong is the bank’s single largest market. However, HSBC has argued that while Asia appears to be the dominant source of its revenues, much of this is actually business with Western clients that gets booked in the region.

In an investor presentation last year, HSBC said that half of its foreign exchange revenues booked in the East came from Western clients, while about 65% of securities services revenue in the East originated in the West. Highlighting these so-called network effects will be a key part of HSBC’s case to shareholders that carving up its worldwide business does not make sense.

Analysts at Barclays Plc estimated in a research note this month the changes could knock 3% to 8% off the group’s market value. Also, any in-depth work on breaking up the bank would take more than a year, according to two people with knowledge of the company’s inner workings, highlighting how time-consuming any spin off of the Asian business could be.

https://www.bnnbloomberg.ca/hsbc-begins ... -1.1764942

With respect, this does not I think fall in to the category of Company News. This is a comment by Bloomberg. As far as I can see, there has been no RNS on this subject.

Dod

Moderator Message:
Just for clarification, news sources are not limited to the Regulatory News Service of the London Stock Exchange. - Chris

[monabri]

Based on the alleged comment from a Ping-An comment regarding the Prudential split and looking at the shareprice performance of Prudential since the split in Oct 19, the case, to my eyes, looks weak.

If we look at comparative total return over the last 18m for example. The Pru had been operating independent of M&G for a year (Oct 19 to Nov20 when the plot starts).




Maybe we should have a look at the demerged MNG.



The conclusion, imho, is that the demerger hasn't done much for Prudential and I would posit it has been harmful.






21st October 2019
https://www.prudentialplc.com/en/invest ... c-demerger

[Dod101]

Thanks for that monabri. I suppose the real question re the Pru demerger is whether the sum of the parts makes the whole (Pru plus M & G) worth more or less than before.

The Pru part being based in Hong Kong is probably seen to be open to geopolitical risk and the same of course could be said of any HSBC split. However the HSBC UK bank is sizeable and would presumably be rated similar to its UK counterparts but where that would put the sum of the parts I do not know.

Dod

[idpickering]

Moderator Message:
Just for clarification, news sources are not limited to the Regulatory News Service of the London Stock Exchange. - Chris

Thanks for clarifying this aspect Chris. I do sometimes wonder why I bother though tbh. You can't please everyone it seems?

As regards HSBC, I'm still pondering over whether or not, to buy back into the stock?

Ian.

[Dod101]

HSBC Begins Internal Analysis to Help Rebut Proposal for Split.

HSBC Holdings Plc has begun an internal review that’s part of an effort to rebut calls from its largest shareholder to discuss splitting off its Asian operations.

The London-headquartered bank is examining the case for a break up after Bloomberg reported late last month that Ping An Insurance (Group) Co. was pushing the lender to spin off its Asian unit to improve returns, according to people familiar with the matter, who asked not to be identified discussing private information.

Executives are against the idea of splitting up HSBC but have begun the analysis in an effort to push back against Ping An’s argument that the bank’s investors would do better from being able to choose to invest in a pure-play Asian business headquartered in Hong Kong.

Work is in the early stages, but one of the people said the aim was to complete the report in the coming weeks and present it to the bank’s directors. Prudential Plc’s split, the insurer which carved off its Asian unit from its UK operations in 2019, is regarded as a poor comparison given the limited network effects the insurance industry can exploit. Ping An had said in a private memo that the break up of Prudential provided a precedent for splitting up HSBC.

A spokeswoman for HSBC declined to comment. A representative for Ping An didn’t immediately respond to a request for comment.

About 65% of HSBC’s of pretax profits last year came from Asia, while Hong Kong is the bank’s single largest market. However, HSBC has argued that while Asia appears to be the dominant source of its revenues, much of this is actually business with Western clients that gets booked in the region.

In an investor presentation last year, HSBC said that half of its foreign exchange revenues booked in the East came from Western clients, while about 65% of securities services revenue in the East originated in the West. Highlighting these so-called network effects will be a key part of HSBC’s case to shareholders that carving up its worldwide business does not make sense.

Analysts at Barclays Plc estimated in a research note this month the changes could knock 3% to 8% off the group’s market value. Also, any in-depth work on breaking up the bank would take more than a year, according to two people with knowledge of the company’s inner workings, highlighting how time-consuming any spin off of the Asian business could be.

https://www.bnnbloomberg.ca/hsbc-begins ... -1.1764942

With respect, this does not I think fall in to the category of Company News. This is a comment by Bloomberg. As far as I can see, there has been no RNS on this subject.

Dod

Moderator Message:
Just for clarification, news sources are not limited to the Regulatory News Service of the London Stock Exchange. - Chris

I never claimed that they were. I was just pointing out that this 'news' story is actually just chat/comment from a journalist. it is not 'news' in the sense that an RNS from a company would be and therefore it is worth much less to me at least, and probably to others.

Dod

[idpickering]

HSBC Considers an IPO of Business in Indonesia.

HSBC Holdings Plc has been examining an initial public offering of its Indonesian business to tap buoyant investor demand in the world’s fourth-most populous country.

https://finance.yahoo.com/news/hsbc-sai ... 17783.html

Ian.

[idpickering]

INTERIM RESULTS FOR 2022 AND CONSIDERATION OF PAYMENT OF AN INTERIM DIVIDEND FOR 2022 HALF YEAR.

The following is the text of an announcement released to the Stock Exchange of Hong Kong Limited on 20 July 2022 pursuant to rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited:

Pursuant to Rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, notice is given that a meeting of a committee of the Board of Directors of HSBC Holdings plc will be held on 1 August 2022 to consider the announcement of the interim results for the six month period ended 30 June 2022 and to consider the payment of an interim dividend on the ordinary shares for the 2022 half year.

https://www.investegate.co.uk/hsbc-hold ... 37161321T/

I gather this has nothing to do with dividend payments to holders of HSBC shares in UK?

Ian.

[idpickering]

Transaction in own shares & conclusion of buy-back.

HSBC Holdings plc ("HSBC" or the "Company") announces that it has purchased for cancellation the following number of its ordinary shares of US$0.50 from Merrill Lynch International ("Merrill Lynch") as part of its buy-back as disclosed in the announcement dated 3 May 2022 .

https://www.investegate.co.uk/hsbc-hold ... 00101674U/

Ian.

[Dod101]

INTERIM RESULTS FOR 2022 AND CONSIDERATION OF PAYMENT OF AN INTERIM DIVIDEND FOR 2022 HALF YEAR.

The following is the text of an announcement released to the Stock Exchange of Hong Kong Limited on 20 July 2022 pursuant to rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited:

Pursuant to Rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, notice is given that a meeting of a committee of the Board of Directors of HSBC Holdings plc will be held on 1 August 2022 to consider the announcement of the interim results for the six month period ended 30 June 2022 and to consider the payment of an interim dividend on the ordinary shares for the 2022 half year.

https://www.investegate.co.uk/hsbc-hold ... 37161321T/

I gather this has nothing to do with dividend payments to holders of HSBC shares in UK?

Ian.

Ian I did not see this post before now. I think it has everything to do with UK shareholders. This announcement is simply to comply with the listing rules of the HK Stock Exchange. HSBC tells us on its website that it will announce its interim results to the world at 5 am on Monday 1 August, so watch this space.

Dod

[idpickering]

INTERIM RESULTS FOR 2022 AND CONSIDERATION OF PAYMENT OF AN INTERIM DIVIDEND FOR 2022 HALF YEAR.

The following is the text of an announcement released to the Stock Exchange of Hong Kong Limited on 20 July 2022 pursuant to rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited:

Pursuant to Rule 13.43 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, notice is given that a meeting of a committee of the Board of Directors of HSBC Holdings plc will be held on 1 August 2022 to consider the announcement of the interim results for the six month period ended 30 June 2022 and to consider the payment of an interim dividend on the ordinary shares for the 2022 half year.

https://www.investegate.co.uk/hsbc-hold ... 37161321T/

I gather this has nothing to do with dividend payments to holders of HSBC shares in UK?

Ian.

Ian I did not see this post before now. I think it has everything to do with UK shareholders. This announcement is simply to comply with the listing rules of the HK Stock Exchange. HSBC tells us on its website that it will announce its interim results to the world at 5 am on Monday 1 August, so watch this space.

Dod

Thanks for your input Dod. I appreciate it.

Ian.