Proactive Investors - Banks quarterly reporting kicks off next week with scrutiny likely to focus on balance sheets following the turmoil in the US and at Credit Suisse (SIX:CSGN).
HSBC (LON:HSBA) is due to report on Tuesday 2 May, but its AGM is the following Friday where it is having to defend a new call for its Asian business to be split off might be more pivotal.
The bank has faced calls before to move its focus away from London and to Asia, where it increasingly does most of its business.
In the past, HSBC has been able to bat them off relatively comfortably but Ping An (SS:601318), a Chinese insurer with an 8% stake, has said it will back two motions proposed by individual investor Ken Lui.
He wants HSBC to restore dividends to 51c per share and to provide regular updates on the possibility of spinning off its Asia business.
HSBC has urged rejection of the motions, which seem to be a proxy for Ping An's proposals even though the insurer says it has no involvement with Lui.
In a statement, the bank said: “Structural reforms of HSBC’s Asia Pacific businesses suggested by Ping An would significantly dilute the international business model upon which HSBC’s strategy is based.
“This would result in a material erosion of earnings, returns, dividends and shareholder value, and a disruption to our unique global customer service proposition.
“Accordingly, HSBC cannot support or recommend to its shareholders the structural options that have been proposed or otherwise considered.”
HSBC, which says it has met with Ping An twenty times to discuss the insurer's plan, added a vote against the proposals would end the debate.
Ahead of that, the first quarter update will be dominated by the recent banking turmoil.
Analysts at Jefferies expect the bank to have come through unscathed and for HSBC to underline its financial strength by announcing more buybacks and cash sweeteners.
“We now expect a US$2.5bn buyback (in-order to bring its CET1 down to the mid-point of its target range [14%-14.5%]) to be declared, followed by further US$2.5bn buyback at second quarter and US$5bn buyback at year-end.
“This is alongside the resumption of quarterly dividends from the first quarter, and the new guide of a $0.21 special DPS funded by the Canada disposal.”