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HSBC's major shareholders are calling for the disintegration of a banking giant

HSBC’s major shareholders are calling for the disintegration of a banking giant

An HSBC bank branch is seen in central London on August 3, 2009. REUTERS/Stephan Wermot

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LONDON/SINGAPORE, April 29 (Reuters) – HSBC Holdings’ (HSBA.L) The largest shareholder, the Chinese insurance giant Ping An (601318.SS)On Friday, a source familiar with the matter said he had called for the London-based bank to be dismantled.

Ping An outlined its plan to split the company to the HSBC board of directors, according to previous media reports, which also cited people familiar with the matter.

“Ping An supports all reform proposals from investors that can help HSBC’s operations and long-term value growth,” a Ping An spokesperson said on Saturday.

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HSBC has not commented on Ping An’s post but defended its overall strategy in a statement on Friday. “We believe we have the right strategy and are focused on implementing it,” a bank spokesperson said via email.

Reports said the plan would bring greater value to HSBC shareholders by separating its operations in Asia, where the bank makes most of its money, and other parts of its business.

CEO Noel Quinn, who has run HSBC for more than two years, doubled down on his efforts in Asia by moving global executives there and pouring billions of dollars into the lucrative wealth management business, focusing on the region.

Some analysts have also called on HSBC to split up its global business, arguing that the bank makes most of its money in Asia and that its global network is adding costs without providing enough interest.

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HSBC is dealing with escalating political tensions between China, Europe and the United States.

“The proposal makes sense in a political context, but HSBC benefits from having a foothold in both the West and Asia,” said John Cronin, banking analyst at Goodbody, on Friday.

Reuters reported last year that Beijing had become frustrated with HSBC over sensitive domestic and international legal and political issues, from the Chinese crackdown in Hong Kong to the US indictment of an executive at China’s Huawei Technologies. The CEO was released last September.

In 2016, the bank decided to keep its headquarters in London, rejecting the option of shifting its center of gravity to its main profit-generating center in Hong Kong after a 10-month review.

HSBC got 52% of last year’s total revenue of $49.6 billion from Asia, and 65% of its reported earnings before tax from the region, with Hong Kong being its largest market. The bank is listed in both London and Hong Kong.

According to Refinitiv data, Ping An owns an 8.23% stake in the banking giant as of February 11.

British media reports first described the plan last week, without specifying the contributor.

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(Additional reporting by Lawrence White in London and Anshuman Daga in Singapore.) Additional reporting by Ian Withers in London, Radhika Anilkumar in Bengaluru and Selina Lee in Hong Kong; Editing by Arun Koyyur, Louise Heavens and William Mallard

Our criteria: Thomson Reuters Trust Principles.