Ping An cuts HSBC stake days after voting against Noel Quinn’s re-election

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Ping An has cut its stake in HSBC days after it voted against the re-election of the bank’s outgoing chief executive Noel Quinn.

The Chinese insurer sold 5.65mn HSBC shares earlier this week for about HK$391mn, according to regulatory filings. While the disposal is relatively small, reducing its stake by a fraction of 1 per cent, it marks a reversal from the previous six years when Ping An tended to buy shares in Europe’s largest lender. 

Ping An’s disposal comes just a week after Quinn announced his unexpected resignation as chief executive alongside HSBC’s first-quarter results. Days later, the group voted against Quinn’s re-election at the bank’s annual general meeting, according to people familiar with the situation. 

HSBC said that neither Quinn nor the board were aware of Ping An’s intention to object to his re-election and that it was unrelated to his decision to retire. The insurer voted in favour of all other resolutions. 

The bank has had a fraught relationship with Ping An, which launched a two-year activist fight at the bank to split it up and separate its more profitable Asia operation. It ultimately failed to receive support for its plan among other investors but has remained an outspoken shareholder and could put pressure on chair Mark Tucker as he embarks on a search for his third CEO in less than a decade. 

Relations have somewhat improved since the bank reinstated its dividend last year. The lender was banned from payouts by UK regulators during the pandemic, which infuriated Ping An and thousands of small Hong Kong shareholders that rely on them for income.

HSBC has also axed a string of international businesses deemed non-core to the Asia-focused group, including Canada, French retail banking and Argentina.

“The dividend is back [above] 51 cents, plus the Canada payment, so the insurance fund is now receiving the kind of money it identified in the first place when it bought,” said a person close to Ping An.

Ping An first disclosed a stake in HSBC in December 2017 after surpassing the 5 per cent ownership threshold that obliges investors to report their position with Hong Kong regulators. The company then increased its position twice in 2018 and again two years later, becoming the bank’s largest shareholder. 

Its sale this week reduces the stake to 7.98 per cent from 8.01 per cent. It remains one of HSBC’s biggest shareholders. BlackRock is now the bank’s largest shareholder, according to Bloomberg data.

“HSBC is our long-term financial investment,” Ping An said in a statement on Friday. “The bank has maintained unique competitive advantage in Asia. We are confident of its long-term development.”