Chinese insurance giant Ping An has urged HSBC to reduce operating costs by axing jobs and exiting sub-scale peripheral ex-Asian markets.
Ping An’s statement comes as the insurer pushes ahead to split HSBC’s Asian and Western operations to boost income.
With over 8% stake in the London-headquartered bank, Ping An is its largest shareholder.
According to Ping An Asset Management chairman Huang Yong, averaging 7% in the last five years, HSBC’s RoTE has underperformed its peers.
The bank is also behind its peers in terms of market rankings and operating performance, Yong said in a press statement.
The insurer has urged HSBC to allocate resources more effectively between Asian and Western operations as the resource allocation strategy in the past has made the Asian business compensate its European and American operations.
HSBC has also been asked to increase revenue and reduce costs by cutting jobs and reducing IT costs besides selling sub-scale businesses.
Ping An said HSBC Asia contributed to 68.7% of total pre-tax profit in the first half of 2022 and therefore more resources should be reallocated to Asia to gain a higher return.
The European and North American businesses’ contribution was less than 10% respectively while that of Latin America was below 5%.
Yong added: “We will support any initiatives including a spin-off that are conducive to improve HSBC’s performance and value; we will consider any suggestions that will help HSBC improve its development and operation strategy.”