It comes after Ping An on Tuesday ramped up pressure over its break-up strategy that it claims is necessary to improve performance at London-based HSBC.
Responding, the Asia-focused lender wrote in a letter to shareholders that "the board strongly believes that HSBC should focus on executing the current strategy that is delivering".
HSBC argued this was "the best and safest way to continue to deliver substantially more value for shareholders over the coming years".
It called on shareholders to vote against the proposal at the bank's annual general meeting on May 5.
In a rare public statement Tuesday, Ping An had said HSBC was lagging behind international peers and a recent improvement in performance was tied to rising interest rates, which have now peaked.
Ping An outlined revised proposals for restructuring that highlight HSBC's precarious position as US-China tensions rise, with some observers doubting whether Europe's largest lender can continue to straddle East and West.
L'Oreal sales rise despite China blemish
Paris (AFP) April 19, 2023 -
French beauty products giant L'Oreal said Wednesday it managed double-digit first quarter sales growth despite a dip in China at the beginning of the year.
The company said sales rose by both volume and value, jumping 14.6 percent from the same period last year to 10.38 billion euros ($11.38 billion).
The sales performance beat the analyst consensus forecast of 9.8 billion euros established by Bloomberg.
"This performance, which has yet to benefit from China's reopening, demonstrates the strength of L'Oreal's balanced multipolar model," said chief executive Nicolas Hieronimus.
China began to abandon its strict zero-Covid policy that saw huge swathes of the country under lockdown at the end of last year but a wave of infections hindered a quick rebound in commerce.
North Asia sales rose only 1.1 percent due to a drop "in continental China at the very beginning of the year as a result of the evolution of the health situation" the company said.
"From February, Chinese consumer demand for beauty resumed," it added.
Sales grew by 16.6 percent in Europe, L'Oreal's biggest region, with gains lead by cosmetics, perfumes and skin treatments.
By sector, sales of dermatological products soared 34.6 percent. The consumer products division, which includes its Garnier, Maybelline and L'Oreal brands, posted a 15.7 percent increase.
Sales in the luxury division, which includes the Lancome and Biotherm brands as well as beauty products for fashion labels Giorgio Armani and Yves Saint Laurent, rose by 7.7 percent.
"Mindful of the current uncertainties, we remain optimistic about the outlook for the beauty market, ambitious for the future and confident in our ability to keep outperforming the market and achieve another year of growth in sales and profits in 2023," added Hieronimus.
HSBC's largest shareholder outlines bank break-up strategy
Hong Kong, China (AFP) April 18, 2023 -
HSBC's largest shareholder ramped up pressure on the bank to break up its business on Tuesday, saying it was underperforming and has failed to "address key business model challenges".
In a rare public statement, Chinese insurer Ping An said HSBC was lagging behind international peers and a recent improvement in performance was tied to rising interest rates, which have now peaked.
Ping An outlined revised proposals for restructuring that highlight HSBC's precarious position as US-China tensions rise, with some observers doubting whether Europe's largest lender can continue to straddle East and West.
"It is necessary for HSBC to push for structural reform to fundamentally address HSBC's underlying market competitiveness issues," Michael Huang, chairman and CEO of Ping An Asset Management, said in a statement.
Ping An last year suggested a series of ideas for HSBC to separate its business but Huang said the bank's management had "exaggerated many of the costs and risks" associated with a split.
The previous proposals involved spinning off the bank's Asia business into a separate entity listed and headquartered in Hong Kong, and a consolidation of the bank's interests in the region, Huang said.
"HSBC Group has drained HSBC Asia of dividends and growth capital to support its relatively low return non-Asia businesses," he added.
"In effect, HSBC Asia has been subsidising the group's relatively low return non-Asia businesses."
The revised proposals called for London-listed HSBC to engage in a "strategic restructuring" that would see it create a separately listed bank headquartered in Hong Kong.
Huang said the proposal would allow HSBC to retain control over a separate Asia business.
"Secondly, each structural solution would deliver material benefits to the group's shareholders including valuation unlock, capital relief, long-term efficiency gains, geopolitical risk mitigation and competitive repositioning," he added.
However, HSBC said the proposed restructuring alternatives would not "deliver increased value for shareholders. Rather they would have a material negative impact on value."
"We remain clear that our current strategy is the fastest way to deliver returns," the bank said in a statement.
HSBC was among a number of major banks to cancel dividends early in the Covid-19 pandemic after a de facto order from the Bank of England -- a move that riled some Hong Kong investors.
Some retail investors have cited the dividends cancellation as a reason to back Ping An's spin-off proposal.
Related Links
Global Trade News
| Subscribe Free To Our Daily Newsletters |
| Subscribe Free To Our Daily Newsletters |
