The largest shareholder at HSBC has criticised the bank’s management, arguing that it has "fundamentally failed to address key business model challenges".

Ping An, a major Chinese insurer and the largest shareholder in Europe’s biggest bank, has published an update to proposals it initially began pushing for last November calling on the bank's operations to be split.

Ping An has repeated its calls for HSBC to separate its Asia business into a standalone entity that would be listed in Hong Kong. Ping An first revived calls for a split in April of 2022, and has repeatedly argued over the past year that the move could boost the bank's value by tens of billions of dollars.

In a rare public statement, Ping An Asset Management chair Michael Huang said that the costs involved with a split should be “open-mindedly weighed against the benefits”.

Huang slammed the bank’s top brass over HSBC’s underperformance compared to its peers, and said: “Not only did management refuse to countenance any benefits but also, in our view, exaggerated many of the costs and risks.”

Sources at the FT claim that Ping An plans to vote in favour of two shareholder resolutions at HSBC's upcoming annual meeting. The first calls for dividends to be increased to pre-Covid levels, while the second calls on the bank to commit to a regular structural review.

Despite Ping An’s active campaigning, influential proxy adviser Glass Lewis said that shareholders should vote against the two proposals as they are "not in shareholders' interest."

In a note, the adviser said: “The board’s strategy and plans appear valid and are likely to result in greater returns and value, than the overly prescriptive and, in our opinion, unnecessary proposals submitted. We do not believe further evaluation or pursuit of a spin-off is warranted or advisable at this time.”

For its part, HSBC said: “It is our judgement, supported by third-party financial and legal advice, and with third-party assurance, that alternative structural options will not deliver increased value for shareholders. Rather, they would have a material negative impact on value.”

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