15th May 2023 15:44
(Alliance News) - After winning over investors in a key vote on its future, HSBC Holdings PLC on Monday set out targets for its Asia business, which had been at the centre of calls for a separation from shareholders.
HSBC shares traded 1.8% higher at 610.70 pence each in London on Monday,
HSBC said it is targeting mid-single-digit percentage growth in lending over the medium to long term for its Asia business but is more cautious in the short-term. It aims for mid-teens return on tangible equity.
The bank targets high-single-digit percentage growth in revenue for its Wealth arm in Asia.
For the group as a whole, HSBC targets a RoTE of at least 12% from 2023. For 2022 it had reported a return on average tangible equity of 9.9%.
"All parts of HSBC Asia are now motoring," said HSBC Chief Executive Noel Quinn. "In mainland China, we are ideally positioned to facilitate business with the rest of the world; in South and Southeast Asia, we have invested heavily in Singapore, and we have significantly bolstered our growing business in India."
In the wake of its annual general meeting earlier in May, the Asia-focused lender is holding a week-long seminar for investors and analysts in Hong Kong and Singapore.
Ten days ago, HSBC earned a vote of confidence from shareholders, as a key poll which proposed splitting the bank was rejected at its AGM.
Resolution 17, which concerned the strategy review, received the support of just over 80% of shareholders.
"I'm delighted that the large majority of HSBC's shareholders have voted overwhelmingly to support the bank's strategy and draw a line under the debate on the structure of the bank. The board, HSBC colleagues and our shareholders can now move forward with the shared objective of focusing on our customers, driving stronger performance, and creating more value for our investors," Chair Mark Tucker said.
HSBC had urged shareholders to vote against a proposal to spin-off its Asia business. The proposal was backed by Chinese insurer Ping An Insurance Co of China Ltd, HSBC largest individual shareholder.
In a public statement last month, the insurer cited HSBC's underperformance against its peers. It also pointed to HSBC's precarious strategy of straddling East and West amid simmering geopolitical tension between the US and China.
"Being global is how we generate a significant portion of our revenues and is central to our whole strategy," Tucker said.
"A restructuring or spin-off would mean that we lose this revenue, as our bank would no longer have the connectivity which our customers value."
HSBC largely won all other votes without a hitch, though resolutions on a director pay report and the re-election of Chair Mark Tucker received some fairly sizeable opposition.
A vote to re-elect Tucker, though successful, was opposed by just over 20% of voters, as was a poll to approve the directors' remuneration report, authorise political donations and for directors to allot shares.
A vote allowing the company to disapply pre-emption rights in relation to the issue of contingent convertible securities and to allow for the right to call general meetings, bar AGMs, on 14 "clear" days' noticed were rejected by 20% and 23%, respectively.
Contingent convertible securities, or CoCos, are types of debt instruments similar to a convertible bond.
On the votes that received opposition of 20% or more, HSBC said they should be viewed with the "context" of Ping An opposing them.
By Eric Cunha, Alliance News news editor
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