HSBC has flagged the risks of a demerger or spin-off of its Asian business in its half year results statements today (1 August).
The UK-headquartered global bank had been urged by shareholder Ping An Insurance Group Co of China to look at separating its Asian business to unlock greater value for shareholders.
HSBC said external advisers had reviewed its strategy and, while the results of the review were shared with the board, they would not be made public.
Chief executive Noel Quinn told Reuters on 1 August: "Look at the half-year results and you'll see the value of the current strategy."
The bank reported a pre-tax profit of $9.2bn for the six months ending 30 June, down from $10.84bn a year ago, but ahead of the $8.15bn average estimate from analysts.
"Our strength as a well-connected, global institution is the main reason our wholesale clients choose to bank with us and we are determined to capitalise on the advantages our network gives us," Quinn said in an earnings statement.
HSBC is headquartered in the UK but makes around two-thirds of its profits in Asia.
Walid Koudmani, chief market analyst at financial brokerage XTB said: "We saw investors buy into HSBC shares price in early trading after the bank announced plans to restore its dividend back to pre-pandemic levels.
"This has gone some way already to restoring shareholder confidence after a volatile year in which activist investors called for a break-up of the bank between its Asia and western operations. Investors also cheered the bank's results, with pre-tax profits hitting $5bn in its fiscal second quarter, far higher than market consensus for less than $4bn. The result still remains slightly lower than the same period a year ago."
