HSBC investors reject plan to split bank in meeting disrupted by climate protest

Majority of shareholders reject proposal to spin off Asian operations, after hour of disruption from campaigners

HSBC has defeated an attempt to split up the bank after a majority of investors rejected a plan backed by its largest shareholder at the bank’s annual general meeting, which was heavily disrupted by climate protests.

The bank’s chair, Mark Tucker, announced that a majority of shareholders had backed him and the board in rejecting the proposal to spin off HSBC’s Asian operations, he said at the meeting in Birmingham on Friday.

Several protesters interrupted the meeting after 12 minutes, beginning an hour of disruption in which Tucker and the chief executive, Noel Quinn, repeatedly stopped speaking until the bank’s security removed the campaigners. Protesters sang reworded versions of Y.M.C.A. by Village People and A Message to You, Rudy by the Specials.

The UK’s biggest bank has come under pressure from campaigners to cut its financing of fossil fuels, but Tucker and Quinn insisted the bank was acting responsibly on climate issues when asked repeatedly by shareholders if they would reduce lending to oil and gas companies. One question came from a resident of the Verde Island Passage, a marine biodiversity hotspot being targeted for fossil fuel investment.

While the meeting was dominated by the climate protests, for the company’s board – who watched stony-faced as protesters were removed – the key outcome of the meeting was the results of the shareholder resolution on breaking up the bank.

A fifth of the votes cast were in favour of the resolution. Shareholders holding just over half of the bank voted.

The resolution called for HSBC to spin off its Asian operations, after the Chinese insurer Ping An, which owns 8% of the bank, last year said the move would increase value for shareholders.

The resolution was brought by Lui Yu Kin, an individual shareholder from Hong Kong. However, Ping An last month said the resolution and another to restore dividends to pre-Covid levels “have their merits”.

Other shareholders had said they opposed the resolution. The Norwegian state-owned Norges Bank Investment Management, which controls 3% of HSBC’s shares, this week said it would vote against.

Quinn and Tucker had repeatedly said shareholders should vote against the resolution.

“We considered alternative structural options last year and we did so rigorously,” Quinn said. “Our analysis showed that such options would destroy value and put your dividends at risk. Our current strategy is the fastest and safest way of generating returns.”

Quinn also addressed the criticisms of the climate protesters. Answering a question on HSBC’s funding for fossil fuel extraction, he said the bank had had extensive engagement with oil and gas companies.

“I believe we are doing the right thing by transitioning to net zero over time, and financing that transition,” Quinn said.

The rival bank Barclays also faced significant disruption at its annual meeting on Wednesday from climate protesters.


Jasper Jolly

The GuardianTramp

Related Content

Article image
HSBC shows what happens when a bank stops shooting itself in the foot | Nils Pratley
The cleanup of HSBC, forced by scandals including the £1.2bn fine in the US, is finally delivering for shareholders

Nils Pratley

31, Jul, 2017 @6:25 PM

Article image
Blow for Barclays as 20% of shareholders reject climate strategy
Bank plan meets opposition after environmental protesters disrupt AGM in Manchester

Kalyeena Makortoff Banking correspondent

04, May, 2022 @5:16 PM

Article image
Watchdog bans HSBC climate ads in fresh blow to bank’s green credentials
Lender told it must in future acknowledge its role in climate crisis after ‘misleading’ Cop26 campaign

Kalyeena Makortoff Banking correspondent

18, Oct, 2022 @11:01 PM

Article image
Investors force HSBC shareholder vote on structural overhaul
Minority shareholder Ken Lui leads campaign seeking to split bank’s Asian and western businesses

Anna Isaac

26, Mar, 2023 @11:20 AM

Article image
Lloyds accused of ‘stuffing bankers’ pockets’ as it proposes £9.1m CEO deal
Chief executive Charlie Nunn could receive £9.1m payout, while top performing bankers to share £446m bonus pot for work in 2022

Kalyeena Makortoff Banking correspondent

22, Feb, 2023 @6:42 PM

Article image
Legal & General defends holding Shell stock in climate fund
Investor says it is seeing ‘positive signs’ from oil firm after PensionBee clients question inclusion

Kalyeena Makortoff

22, Nov, 2019 @3:35 PM

Article image
Dividends from UK-listed firms up 16.5% in 2022, far outstripping pay rises
Rise in share income particularly steep for investors in banks and oil companies

Rob Davies

30, Jan, 2023 @12:01 AM

Article image
World's biggest fund manager vows to divest from thermal coal
BlackRock CEO says climate crisis will now dictate investments but environmentalists remain wary

Joanna Partridge

14, Jan, 2020 @4:27 PM

Article image
HSBC suspends head of responsible investing who called climate warnings ‘shrill’
Bank investigating Stuart Kirk’s conference speech deriding flooding risks and climate warnings from UN and Bank of England

Kalyeena Makortoff Banking correspondent

22, May, 2022 @10:10 PM

Article image
HSBC pressured to sack banker who discredited climate crisis warnings
Speech by head of responsible investing Stuart Kirk dismissed global heating and joked about flooding risks

Kalyeena Makortoff Banking correspondent

20, May, 2022 @1:29 PM